For 2008, I believe housing starts will likely drift lower as reduced affordability and rising mortgage rates dampen home sales and builder confidence, in addition to the spillover effects in Central Canada from the intensifying U.S. housing-led slowdown. Housing starts nationwide are expected to dip to 211,700 units in 2008, owing to high mortgage carrying costs as indicated by the Canada Mortgage and Housing Corp.

However, I anticipated that a continuing tight labour market, robust income growth and high levels of consumer confidence will likely help to offset the dampening effect of rising mortgage carrying costs on the demand for new and existing homes in British Columbia.

I’ve been keeping track of employment growth in British Columbia and specifically, in Vancouver. In January 2008, the increase in jobs was wholly attributable to an increase in full time. Over the last 12 months, full-time work has grown at nearly double the rate of part time. Employment increased in January 2008 by 12,000, all in full time jobs and across several industries in British Columbia. In 2007, the provincial employment growth was +2.4%, above that of the Canadian average.  

Specifically, the Vancouver job market for the period of January 13, 2008 to February 09, 2008 was 4.3%. This was lower than the national average where employment grew by an estimated 46,000 in January 2008, pushing the unemployment rate back down to 5.8%, matching the 33-year low reported in October 2007.

Along with the strong job market, there are also job creation benefits of the 2010 Olympics. It is estimated that there will be a 55,000 direct person years of employment and 77,000 total person years from 2008-2015 period, with peak incremental employment of 22,000 direct person years of employment in 2010. The positive news is that the strong job market means that Vancouver real estate is likely to continue to be buoyant to 2010 and beyond.  

For Vancouver real estate, call Chris Tioseco at 604.618.6314 or email chris.tioseco@shaw.ca to learn more about the housing trends for your next investment from his personal insights.