British Columbia saw another monthly decline in employment, with 9,700 fewer people (down 0.3 per cent) working in June. Despite the monthly retrenchment, year-over-year hiring growth—at 2.6 per cent—was still above the national performance of 1.7 per cent.
While lower employment signals a moderation in hiring, the jobless rate still declined 0.4 points from May to 5.2 per cent, or a 0.8-per-cent drop in unemployment.
June was the first time B.C.’s labour force contracted since February. It partially reversed the expansion seen in May and suggests a still-tight labour market for the province.
The labour participation rate meanwhile dropped to 64.6 per cent from 65.3 per cent in May, alongside with a 0.3-per-cent increase in B.C.’s population.
Part-time losses led the employment decline with a 1.1-per-cent decrease (6,500 people), which added to May losses. Full-time employment edged down 0.1 per cent or by 3,100 people. The Vancouver census metropolitan area (CMA) saw a 1.2-per-cent decrease in its employment level, while the area’s unemployment rate fell to 5.4 per cent from 6.1 per cent in May. During the same month last year, the Vancouver CMA’s unemployment rate was also at 5.6 per cent.
By sector, B.C.’s services-producing industries led the decline in provincial employment in June, with a 0.6-per-cent decrease, offsetting the 1.1-per-cent gain registered among goods-producing industries. Construction employment rose by three per cent (6,900 people), offsetting the decreases seen across other goods-producing industries. Wholesale and retail trade reported a large expansion in hiring in June—up 3.4 per cent (14,000 people). Notable hiring declines were seen in professional, scientific and technical services (down 5.2 per cent) and health care and social assistance (down 1.6 per cent).
On the housing front, the Bank of Canada’s first rate cut in four years pushed a few more buyers off the sidelines in June but home sales in B.C.’s Lower Mainland continued to struggle at a recessionary pace. Market conditions remained soft with more sellers testing the market—pushing resale inventory up and nudging prices lower.
MLS sales in the region spanning Metro Vancouver and Abbotsford-Mission reached 3,673 units in June. This tumbled 24 per cent from a year ago and was 12 per cent lower than May. Our adjustment for seasonal factors suggests a shift amidst lower borrowing costs and elevated demand on the sidelines, but at this point, the sluggish pace of sales remains the main takeaway. This was among the fewest same-month sales since the pandemic and was a quarter below the June average from 2010 to 2019. Sales in the first half of 2024 reached 21,371 units—4.4 per cent lower than a year ago and the lowest since the 17,850 units sold in the first half of 2020.
Sluggish sales are contributing to a rapid increase in inventory and adding to the accumulation of elevated new listings. At 21,188 units, active listings were 43 per cent higher than a year ago, and the highest since mid-2019. The jump in resale supply reflects more sellers anticipating that stronger sales will accompany lower interest rates, but some investors could be buckling under the weight of interest-rate renewals, as well as tax and rental policy changes that affect investments. Over the short-term, trends are less favourable to sellers even as the sales-to-active-listings ratio remained in balance at about 18 per cent.
The average price in Metro Vancouver fell 0.9 per cent to $1.24 million after a 2.5-per-cent increase in May. That said, the average price typically declines by more in June, suggesting prices remained sturdy despite low sales and more listings. The average price was up 2.8 per cent, year over year. Benchmark prices pointed to weaker growth with the monthly change at 0.4 per cent (unadjusted) and with a year-over-year decline of 0.5 per cent. Multi-family prices have been weaker.
While June data extended a disappointing start to the year for the housing market, it is worth noting that despite sluggish sales, prices have remained resilient. Demand is waiting on the sidelines but is constrained by low affordability. Lower interest rates are likely to provide some support for sales growth and curb some of the growth in inventory. Moderate supply levels, tight rental markets and an expectation of lower construction of ownership housing all mean the affordability challenge will persist. Home values are forecast to hold steady for most of 2024 before rising four per cent in 2025, driven by lower interest rates and population.
Bryan Yu is chief economist at Central 1.
