the rennie landscape - Spring 2021

the rennie landscape - Spring 2021

rennie landscape spring 2021

Dear Reader, Welcome to the spring 2021 edition of the rennie landscape. We are now one year into Covid-19 and there is finally light at the end of the tunnel—and it isn’t an oncoming train. Canada’s labour market has slowly but surely regained most of the jobs lost during the first few months of the pandemic, social gathering restrictions in British Columbia are being incrementally loosened, and vaccinations have begun. By the end of 2021, it is likely that our world will resemble the one we left behind in February 2020. Having said that, there are some legacy effects of Covid-19 for Metro Vancouver and other metros across the country. This includes expanded future immigration flows, elevated household savings, and diminished new and resale housing supply. The question of whether inflation will return with a vengeance is a fair one, with the jury still being out. While a temporary surge may be experienced in the coming months, it is unlikely that sustained consumer price increases will become the norm; in such a case, interest rates will continue to be lower for longer. This in turn will make it easier for households to participate in Metro Vancouver’s housing market, including those looking for a bit more space and those buying their first home. There is much to look forward to in the coming months: the days are getting longer, the air is getting warmer, and together we’re getting closer to being closer together. We hope you enjoy this edition of the rennie landscape. As always, continue to be safe and stay positive.

Ryan Berlin DIRECTOR OF INTELLIGENCE & SENIOR ECONOMIST [email protected]

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contents

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ECONOMY

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RATES

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CREDIT & DEBT

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DEMOGRAPHICS

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HOUSING

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POLICY

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economy

01. economy Not surprisingly, early incremental (re-)gains in employment in Metro Vancouver have been replaced with much slower growth. Still, it is growth nonetheless.

EMPLOYMENT: UP, UP...HOORAY

Twelve months into the pandemic, and employment across Canada remains below pre-Covid-19 levels. The fact that such a statement likely elicits nary an eyebrow raise is a testament to the reality of the past year: we have somehow become comfortable with the notion that we have been going through the worst economic downturn since the Great Depression. What’s more, we implicitly agreed to do it to ourselves. Our collective ambivalence towards our economic circumstances—they are painful but temporary, afterall—likely stems from two sources. One, there were no great imbalances in our economy heading into this Great Suppression: unemployment was low, but not so low as to overheat the labour market; interest rates were low, but not so low as to over-encourage risky borrowing; and real GDP was plugging along at below- historical averages. Two, fiscal and monetary policies were enacted from the outset of the pandemic to bridge the gap from “here” (pre-Covid-19) to “there” (post-Covid-19).

In other words, more-than-adequate financial reinforcements flooded in. Furthermore, jobs in Canada’s major metros have continued to recover after bottoming out in May, although the pace of recovery has varied somewhat over the past 6 months. In Greater Toronto, for example, employment was only 2% below pre-Covid-19 levels in September, but is now 6% lower. In Greater Montreal, employment was 2% below its pre- Covid-19 level in August and, after a slide backwards, is again only 2% below February 2020. In comparison, Metro Vancouver has been the little engine that could, with a bigger crater carved into the region’s employment landscape early on and a slower initial recovery being replaced by continued job growth that now has employment only 2% below February 2020’s level. It’s good news for the local economy and housing market, but there is still a ways to go.

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economy

(SQUARE) ROOTING FOR METRO VANCOUVER’S JOB RECOVERY

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MONTHS SINCE THE PANDEMIC BEGAN

VANCOUVER

TORONTO

MONTREAL

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