BETTER DWELLING - Canadian real estate prices have been spiraling lower, but is a change in trend around the corner? Data from the Canadian Real Estate Association(CREA) shows that the price of a typical home increased in February. The national composite’s benchmark price had not moved higher since rate hikes began nearly a year ago. One increase is not a trend, but it can be a sign that buyers see the end of monetary policy’s influence on prices.

Canadian Real Estate Prices Climbed $7,000 In February
Canadian real estate prices changed course last month, recording the first increase in nearly a year. The composite benchmark rose 1.0% (+$7,100) to $715,400 in February. Despite the gain, prices remain 15.8% (-$133,900) lower than the same month last year. Home prices haven’t seen an increase in 11 months, which is sure to catch anyone’s eye that notices the shift.

Annual Growth Shows The Largest 12-Month Contraction On RecordWatchers of the annual growth rate likely missed the move due to a base-effect skew. February’s 12-month change for the benchmark was 3 points lower than the month before. Despite prices rising in the month, it failed to keep up with the monster move from the previous year. This produced the largest drop for the annual growth rate ever recorded, even with rising prices.

​Shifting Buyer Mentality, Not Inventory Is Driving This TrendThere must be a shortage of inventory? Not exactly, conditions were loosened last month. The Sales to New Listings Ratio (SNLR), which is the industry’s preferred measure of inventory absorption, fell to 56.7% in February, one point lower than January and 20 points lower than last year. This ratio is firmly within a “balanced” market range, meaning it is priced correctly for the level of demand. Essentially, sales fell a lot faster than inventory, helping to relieve pressure.

If it’s not tighter inventory, what’s pushing prices higher? As mentioned with Toronto’s recent numbers, a change in sentiment is the driver. The Bank of Canada (BoC) rate “pause” in January was read as the peak for interest rates. It was reinforced by the Governor partially attributing the pause to high household debt, which doesn’t just disappear immediately. By revealing they’re in a pinch, the market read that as the inability to keep up. 
​
The current bank run crisis in the US is likely to only reinforce this sentiment. Though the risk of low rates sparking demand and thus inflation, also remains a risk in the other direction. No one planned on double digit inflation during the early 80s, it was sparked in part by the premature easing of policy. ​

ISMAEL SHAKIR (REUTERS) OTTAWA — The Bank of Canada will hold its key policy rate at the current level of 4.5 per cent until the end of this year and will start cutting rates in January 2024, Canada’s independent budgetary watchdog forecast on Thursday.

The central bank has raised rates at a record pace over the past year to tame inflation that hit a four-decade high of 8.1 per cent in June.

After its last hike in January, the Bank of Canada became the first major central bank fighting global inflation to say it would likely “pause” further moves as long as prices continue to come down as it has forecast.

“We expect the Bank of Canada to maintain its ‘pause’ through to the end of this year,” Parliamentary Budget Officer (PBO) Yves Giroux said in a report. “With CPI inflation on track to return to its two per cent target, we then expect the bank to start lowering its policy rate early next year.”
Canada’s budgetary watchdog said it expects interest rates to fall to 2.5 per cent by December 2024.
While money markets still expect that the central bank will keep its benchmark rate unchanged at next week’s policy announcement, they are pricing in additional tightening later in the year.


Canada’s economy will stagnate this year as tighter monetary policy takes hold, the PBO projected.
​

“Following a stronger-than-expected performance in the second half of last year, we project the Canadian economy to effectively stagnate over the course of this year,” Giroux said.


Economic data have been mixed since the central bank signalled the pause, with a blowout jobs report in January showing continued labour market tightness, while inflation and GDP data have been more muted.


(Reporting by Ismail Shakil in Ottawa; Additional reporting by Fergal Smith; Editing by Mark Porter)

The province has unveiled a “one-stop-shop” approach to provincial permitting to help speed up approvals and construction to build more homes in the face of a housing crisis.

CINDY HARTNETT, VICTORIA TIMES COLUMNIST (BUSINESS IN VANCOUVER) - “Today we are taking action to remove obstacles to building the homes that we need,” Premier David Eby said Monday in an announcement at the University of B.C.

“We will be identifying those high impact housing projects and moving them through the system maintaining those high standards, but prioritizing them through the system to get them out the door so that we can start out building so we desperately need as our population growth was dramatically,” said Eby.

​Homebuilding in B.C. can require multiple provincial permit applications involving different ministries and processes, including permits related to riparian area approvals, water licences, transportation approvals, road rezonings, contaminated sites, and requirements for heritage inspections, according to the province.

The average approval time is two years “and obviously are goal was to improve on that,” said Eby in a media availability following the announcement. “The goal is to reduce that dramatically” — from years to months.

The permitting strategy will be streamlined, potentially eliminating the need for multiple applications across ministries, says the province.

“This is more than just a single place to drop off your application,” Eby said. “Our goal is an expedited process where information doesn’t have to be re-submitted, reconsidered and redetermined by multiple decision-makers throughout the process.”

The government has introduced several housing-related changes since Eby became premier in November, including changes to the Housing Supply Act to set targets in the province’s fastest-growing municipalities as well as to the Strata Property Act to open up more rental options and more housing for families.

Eby said B.C. municipalities have in the past cited long wait times for provincial approvals and now the province is doing its part. 

“One thing that’s been obvious to me is each time I’ve raised this issue, the mayors rightly point to the problem and they say: ‘Look, you need to get your own house in order’ … So that’s what today’s announcement is all about,” he said. “We’re doing our part, we’re doing the work.” 

While the single application process is being established over the coming months, a cross-ministry team focused only on processing housing permits will be in place to expedite permits and approvals.
To start, 42 new full-time positions will prioritize housing that most urgently needs to be built, such as Indigenous-led projects, B.C. Housing applications and applications for buildings with multiple units.
​
Once those positions are filled, the plan is to to increase the team to 203 positions.
ceharnett@timescolonist.com