Retail spending in B.C. marched steadily higher in June with a 0.2% sales increase from May to a new record high of $8.29 billion.
Metro Vancouver led the provincial increase with a 1.6% gain. While below the national increase of 4.2%, the latter reflected a rebound following third-wave restriction-induced declines during the prior two months. Ontario sales rose nearly 10% and contributed more than three-quarters of the national monthly increase.
More telling is B.C.’s performance relative to pre-pandemic levels. Sales were 13% higher than in February 2020 – strongest among Canada’s large provinces and trailing only Nova Scotia and Prince Edward Island. Metro Vancouver sales were 18% above February levels. Nationally, sales were 8% higher. B.C.’s performance reflects the province’s less restrictive health orders and robust ancillary sales from the hot housing market.
B.C. home sales slowed for a fourth-straight month in July to extend the normalization trend after an unsustainably high early-year sales. Regionally, the steepest monthly declines came in the Interior, where Okanagan area sales fell 16% and 12.5% in the Kootenay. Adding to broader trends, wildfire activity may also have factored into lower activity. Sales declined 4.6% on Vancouver Island and 8.8% in Chilliwack.
That said, levels remain elevated. Despite a 7% year-over-year decline, unadjusted sales were 20% above the July average from 2010 through 2019 and second highest since 2016.
Despite lower sales, prices remained firm due to limited supply of homes for sale. Seasonally-adjusted new listings fell 13% to the lowest level since May of last year with steep declines in most areas of the province. Month-end inventory fell for a third month and was 30% lower than a year ago, contributing to persistence of sellers’ conditions. The average price held steady at $912,567. Meanwhile, the benchmark home values continued to rise, led by a 2.5% Vancouver Island gain (excluding Victoria), while Victoria and the Thompson-Okanagan recorded month-to-month growth of 1%-2%.
Further moderation in trends is expected, reflecting a normalization of the pandemic economy. But low inventory remains a key support for prices. High-performing smaller markets are at a greater risk of pullback, but this depends on the future of remote work, while large urban areas should see a boost to condo markets as immigration picks up. •
Bryan Yu is chief economist at Central 1 Credit Union.
