Labour Market Remains Buoyant Through 2019
For Real Estate Investment Network – Labour Market Remains Buoyant Through 2019
by Steve Saretsky, July 8, 2019
Happy Monday Morning!
Canadian labour numbers came in softer than expected in June. This offers a strong co relation with the Real Estate Investment Network trends. Overall June employment fell 2200, in large part due to self-employed positions falling 41,000 after rising 62,000 in May. The large monthly gyrations beg the question, is there any other data set as volatile as Stats Canada labour surveys?
Despite the head scratching volatility there is no denying the labour market remains buoyant throughout 2019. The national labour market has added 41.3K jobs per month on average through the first six months of the year, with nearly 88% consisting of full-time positions. Further, hours worked accelerated to 1.8% year-over-year in June, while wages for permanent workers inflated 3.6% year-over-year, the strongest pace of growth since May 2018.
Wages have surged in some of the larger provinces across Canada. Including annual growth of 3.7% in Alberta, 4.2% in Ontario, and an eye watering 5% in Quebec.
It’s not all rosy though. In the province of BC, where housing affordability remains stretched and wage growth is needed most, average hourly earnings increased just 1.7% from a year ago, below the rate of inflation. Further deterioration in the housing market continued in June, prompting builders to hit the pause button on new projects, while sparking fears of potential layoffs in the real estate and construction sector.
Home sales across Greater Vancouver are now off to their slowest start through the first half of the year since the year 2000. Weak consumer confidence in the housing market has sent prices tumbling, detached home prices slid 10.9% year-over-year in June, while condo prices footed an 8.9% decline, the steepest annual decline since 2009.
BC’s finance minister Carole James was unfazed, electing for a more positive spin on the abysmal sales figures, “After years of skyrocketing prices we’re finally starting to see more balance in the housing market. We’re seeing moderation in the cost of condos, townhomes and detached homes, while housing supply is at a five-year high.” James added, “We’re leading the country in our work to ensure that housing is used for people, rather than a haven for speculation or worse, money laundering. I’ll continue to watch the housing trends closely but am cautiously optimistic that the housing market is returning to balance.”
Three Things I’m Watching:
1. Average hourly earnings- which are needed most in the province of BC, are growing below the rate of inflation and less than other more affordable provinces.
2. Greater Vancouver sales transactions through the first half of 2019 are at a 19 year low, their weakest start since the year 2000.
3. Greater Vancouver condo prices are still sliding lower, dropping 8.9% year-over-year in June.
