Aligning with a solid national uptick, B.C. employment surged 0.7% (or 18,200 persons) from October to a seasonally adjusted 2.49 million. Full-time employment rose for a third straight month with a 0.2% gain (or 4,100 persons) but a part-time employment rebound following two months of declines led to the overall increase. Metro Vancouver led November’s rise with a 1.1% gain.
November’s increase turned up the labour-market heat following recent softness. The labour market returned to a rolling boil with year-over-year employment growth of 3.8%, and average year-to-date performance at a similar pace.
Meanwhile, labour market slack is minimal. The unemployment rate edged down 0.1 percentage points to 4.8%, the lowest level since mid-2008. While a robust hiring environment has attracted more residents from other parts of the country, it has been insufficient to satiate labour and skills demand constraining job growth and lifting wages. Year-over-year growth in wage rates accelerated in November to over 5%.
The average vacancy rate for purpose-built rental apartments in B.C. was a scant 1.3% in October, unchanged from 2016 and well below the average of more than 2.5% from 2009 to 2013. Vacancy rates fell in most urban areas from a year ago, with tighter markets generally observed in the Lower Mainland, Southern Interior and Vancouver Island markets reflecting stronger economic conditions and higher population growth, while commodity-price-induced economic weakness in northern markets contributed to above-average rates.
Rates in B.C.’s census metropolitan areas (CMAs) were less than 1%, with Vancouver at 0.9%, Victoria at 0.7%, and Abbotsford-Mission and Kelowna at 0.2%.
Scarcity of available units has renters scrambling for accommodations, which has given landlords considerable bargaining power. Same-sample rent growth accelerated to 5.8% (up from 5.5% in 2016), well outpacing inflation and the annual allowable rent increase of 3.7% reflecting strong growth in turnover rents. Vancouver CMA rent rose 5.9%, Kelowna’s increase was 8.6% and Victoria’s was 7.7%.
Tight rental markets will persist given growth in the economy, migratory inflows and ongoing erosion in affordability for those looking to buy. Rising international student populations will also put upward pressure on demand. That said, high levels of rental construction are underway, and completion of condominiums, many of which will likely enter the rental market, will provide a mild offset. •
Bryan Yu is deputy chief economist at Central 1 Credit Union.