rennie landscape Q1 2019

rennie landscape Q1 2019

rennie landscape Q1 2019

Welcome to the first edition of the rennie landscape, a quarterly publication produced by rennie’s intelligence team that tracks a variety of demographic and economic indicators that directly and indirectly influence our housing market here in Metro Vancouver. With the level of uncertainty that currently prevails in residential real estate, we hope you will find this publication particularly useful, as it focuses on what matters most in our market. The headlines we see in today's media often distort the fundamental facts; our goal is to provide our partners and colleagues with a basis for evaluating the trajectory of the factors that collectively define the context for the real estate market. We’ve identified six pillars of our market: demographic changes, the interest rate environment, the policy context, residential market features, credit and debt trends, and economic fundamentals. Within each of these pillars are a number of indicators we weigh-in on each quarter as we track the changes that will influence future real estate market evolutions. It is our goal for the rennie landscape to become a dependable, strategic decision-making tool, whether you’re an individual buyer or seller, developer, builder, municipal planner, or other market stakeholder or industry partner. Should you have any questions, the rennie intelligence team is here to assist.

Ryan Berlin SENIOR ECONOMIST

rennie.com

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contents

04

DEMOGRAPHICS

10

ECONOMY

20

CREDIT & DEBT

28

RATES

36

RESIDENTIAL

44

POLICY

47

POCKET GUIDE

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demographics

01. demographics

Canada’s latest immigration targets will benefit the workforce; we need to rise to the challenge of providing enough housing.

CANADA’S LATEST IMMIGRATION TARGETS

Canada is a country that has been built by immigration. To this day, immigration plays a significant role in not only growing the national population, but also shaping its workforce, its cultural landscape, and its cornerstones of universal health care and the Canada Pension Plan. And immigration flows continue to increase, with an average of almost 300,000 immigrants being welcomed to Canada in each of the past two years. Recently, the federal government laid out its plan for even more immigrants to come to Canada in the coming years, a move meant to counterbalance the economic headwind created by an aging—and consequently, slowly-growing—labour force. Canada aims to open its doors to up to 350,000

immigrants in 2021, up from its first-year target of 310,000 in 2018. If we assume that in the absence of these targets Canada would have continued to welcome roughly 300,000 immigrants each year, the implication of the policy is Canada growing by at least an additional 185,000 people between 2018-2021. For Metro Vancouver, this means an additional 22,500 people will need to be accommodated during this period above and beyond what trends would indicate. The region will need to find a way to add almost 9,000 net new homes to accommodate this additional increment of growth over four years. Are policymakers, developers, and all other market participants ready to take on this challenge?

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rennie.com

demographics

CANADIAN IMMIGRATION ON THE RISE ›

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

*

* through Q3

ACTUAL

TARGET

SOURCE: QUARTERLY DEMOGRAPHIC ESTIMATES, STATISTICS CANADA & RENNIE

rennie.com

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demographics

BRITISH COLUMBIA’S EVER-EXPANDING POPULATION Net international migration continues to drive population growth in BC, which is now home to more than 5 million people.

It was with an air of inevitably that the province’s population finally crossed the 5-million-person threshold in Q3 2018 after BC added 24,635 people from July through September. While of no pragmatic relevance, becoming just the third province in Canada with a population north of 5 million reflects BC’s continued attractiveness to people living elsewhere in the country and, to a much greater extent, those living abroad. By far the biggest contributor to growth in BC’s population in Q3 2018 was net international migration, which added 23,400 people and accounted for 95% of the provincial resident expansion. Natural increase—the difference between the number of people born and those who died—added 2,400 people, though its

contribution has been on the decline for years, a consequence of an aging population and a below-replacement fertility rate that has persisted since the mid-1970s. The latest available >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52

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