Multiple Listing Service® (MLS®) residential sales in the province are estimated to reach 102,350 units this year, a decline of nearly 9 per cent from a record 112,200 unit sales in 2016. MLS® residential sales are forecast to decrease a further 10 per cent to 91,750 units in 2018. Housing demand is expected to remain above the ten-year average of approximately 85,000 units through 2018. The BC housing market is being supported by a strong-performing economy and corresponding employment growth, as well as associated consumer confidence. The BC economy is forecast to expand by 3.8 per cent this year, the fourth consecutive year of 3 per cent or more real GDP growth. The cumulative effect has fueled employment growth to its strongest performance in almost 20 years. Since January 2015, the province has added nearly 180,000 jobs. This has bolstered consumer confidence, with retail sales in BC expected to increase by an extraordinary 9 per cent this year. While provincial economic conditions appear to be on a sound footing, the housing market will face increasing headwinds in 2018.

A rising interest rate environment will certainly erode affordability in the new year, while tougher mortgage qualifications for conventional mortgagors will reduce their purchasing power by up to 20 per cent. In addition, the high level of net migration from other provinces, especially Alberta, over the past few years is expected to wane, which will slow overall population growth. These factors will likely be exacerbated by home prices that are already elevated after several years of significant rates of growth. The supply of homes for sale is now trending at or near decade lows in most BC regions. The imbalance between supply and demand has been largely responsible for rapidly rising home prices.

While slowing demand will help alleviate these conditions, the expansion of the housing stock is necessary to slow the ascent of home prices. There are now over 56,000 units under construction in the province, up 54 per cent over the last 24 months. Many of these units will be completed in 2018, adding much-needed supply to the market. The combination of slowing housing demand and a rising inventory of homes for sale is expected to move the market toward balanced conditions next year, and lead to less upward pressure on home prices.

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The BCREA Commercial Leading Indicator (CLI) increased for the ninth consecutive quarter, rising 2 points in the third quarter of 2017 to 135.3. That increase represents a 1.7 per cent rise over the second quarter and a 7.3 per cent increase from one year ago. The sustained rise in the CLI has been driven by several years of strong growth in the BC economy, particularly in sectors beneficial to commercial real estate activity. While we expect that the almost unprecedented cycle of above trend growth in the BC economy will end next year, the overall economic environment remains very supportive of growth in investment, leasing and other commercial real estate activity over the next two to four quarters. Growth in the BC economy was propelled higher in the third quarter by continued strength in the retail and wholesale trade sector, as well as rising manufacturing sales. Retail sales are on pace to grow more than 9 per cent this year, the highest growth since 1994 and the fourth consecutive year that retail sales have risen more than 6 per cent. Employment growth in the provincial economy is at a more than two-decade high, approaching 4 per cent through the first nine months of the year. Key commercial real estate sectors have been prominent among those industries posting job growth. The CLI’s measure of office employment rose by 7,100 jobs in the third quarter, while manufacturing payrolls expanded by 8,400 jobs to their highest level since 2008. While the economic activity and employment components have propelled the CLI higher, the financial component has been a modest drag on the index. Rising interest rates, widening credit spreads and a slight decline in the benchmark REIT index translated to slightly less favourable financial conditions for commercial real estate in the third quarter.

Variation in the Commercial Leading Indicator can be broken out into three distinct components: » The economic activity component of the CLI follows the overall trend in BC’s economy and reflects changes in economic variables shown to lead commercial real estate activity. » The employment component reflects changes in the commercial real estate environment, due to changes in the overall business cycle. » The financial component acts as an early-warning indicator from financial markets that could signal turning points in the commercial real estate market.

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89 percent of back-to-school shoppers will make their purchases in-person

As back-to-school shopping gears up, 89 percent of consumers plan to take to shopping centers and malls looking for the latest deals, offerings and experiences related to their school supply purchases. The International Council of Shopping Centers (ICSC) released its annual Back-To-School Spending survey today and found that the average back-to-school shopper is expected to spend $353.20. Those making purchases for children in grades K-12 expect to spend $309.60 on average, while those buying for college/post-secondary plan to spend $437.80 on average.

Shoppers looking to make back-to-school related purchases are in search of the best deals and promotions being offered. Two-fifths (40 percent) will wait to start back-to-school shopping until they see advertisements or sale prices in stores. Nearly 90 percent say they are influenced by promotions in terms of the amount they spend and the items they purchase.

“Back-to-school is one of the shopping seasons where we really find people looking for specific items at the best price,” said Tom McGee, President and CEO of ICSC. “Consumers are more informed than ever and research prices and products prior to making a purchase so it isn’t surprising that so many shoppers are waiting for sales and discounts before buying their back-to-school items.”

Discount stores continue to be the most popular venue for back-to-school shoppers with about 69 percent of them shopping those retailers. Office supply stores (37 percent) and department stores (32 percent) will also see strong activity during this back-to-school season.

Additionally, back-to-school shoppers will utilize their mobile devices while in-store shopping for merchandise. Of the 81 percent who will do so, 58 percent will compare prices, 39 percent will download digital coupons, 38 percent will check availability/inventory, and 30 percent will take pictures of items that might be purchased.

When it comes to shopping online, 30% of consumers intend to order items online from retailers with a physical store presence and pick them up at these locations. Already, among shoppers who have used the click-and-collect method, 81% have made an additional purchase(s) at other stores or establishments when picking up their online order.

Other key findings from the survey include:

Physical interaction with goods is the top reason for back-to-school shoppers to visit stores

  • 46% of those shoppers who will visit stores cited the “ability to see, touch, or try on the merchandise”
  • 36% of those shoppers who will visit stores cited the “ability to browse/ease of buying specific items”
  • 35% of those shoppers who will visit stores cited the “convenience of one-stop shopping”
  • 34% of those shoppers who will visit stores cited “avoiding shipping fees”

For many shoppers, bringing their children increases overall expenditures

  • 68% of back-to-school shoppers say that when shopping with their children, they tend to spend more than if they had shopped on their own
  • 28% of back-to-school shoppers were driven to the store by their children


The ICSC Back-to-School Spending survey was conducted online by Opinion Research Corporation on behalf of ICSC from July 6-9, 2017. The survey represents a demographically representative sample of 1,010 U.S. adults 18 years of age and older.