Employment in B.C. was flat for a second successive month in August, pointing to a pause in hiring momentum after a dizzying first-half growth spell. Nonetheless, year-over-year growth of 3.9% was still tops in the country and almost double the national pace. B.C.’s unemployment rate eased 0.2 percentage points to 5.1%.
At the industry level, notable gains in agriculture, professional, scientific and technical services and health care and social services were offset by losses in accommodations and food services, transportation and warehousing and public administration. Lower employment in the Vancouver census metropolitan area was balanced by gains elsewhere in the province.
Job quality also slipped with a sharp decline in full-time employment (1.5%) masked by part-time gain, while self-employment tracked higher.
While employment shows signs of cresting, the labour market remains undoubtedly strong with trends of a low unemployment rate and high labour force participation. Moreover, year-to-date employment growth is stellar at 3.9% through August, led by full-time jobs. Kelowna has led gains with a 10% increase. Vancouver has trailed with a solid 2.3% gain.
Average annual employment growth is forecast to slow to 3.5% this year, with growth of 2% in 2018 and an average unemployment rate of 5.4%.
Further eroding affordability in the market, Lower Mainland home values continued to rise in August on strong demand. Year-over-year home sales rose 18% in the region, and while this largely reflects the foreign-buyer tax drag on year-ago sales, seasonally adjusted sales rose modestly from July and were in line with cycle-high trends from the mid-2000s. A strong economy with low, albeit rising, mortgage rates and the B.C. Homeowner Mortgage and Equity Partnership program continue to underpin demand. Recent rate increases have likely motivated prospective buyers with pre-qualified rates to purchase.
With a dearth of listings, demand has kept the sales-to-active-listings ratio firmly in seller’s-market territory at 38%.
Prices reflect this reality. While the average price slipped from July, constant-quality benchmark measures continued to rise. Multi-family benchmark prices jumped by more than 2% from July, driving year-over-year growth to 21.5% for apartments and 13.9% for townhomes.
Meanwhile the detached benchmark price rose 0.5% from July and 4.9% year-over-year.
Bryan Yu is deputy chief economist at Central 1 Credit Union.