Despite further erosion in Lower Mainland activity, the province as a whole eked out a small increase in MLS home sales in July, marking the first monthly gain since March.
Buoyed by sharp gains in the Kootenay, Kamloops, Chilliwack and Vancouver Island (excluding Victoria) regions, provincial sales rose nearly two per cent from June to reach a seasonally adjusted 5,690 units. Nonetheless, sales remained weak, having slid 10 per cent from January to trend at the lowest levels since late 2010.
The recent decline largely reflected weakness in the Lower Mainland as aggregate sales in Interior markets trended higher and Vancouver Island and Northern regions held steady.
Rising/stable sales in the Interior and Vancouver Island are a sign that housing conditions are steadying in markets hard hit by the recession and subsequent slump in recreational/retiree demand, but low sales-to-active listings ratios point to a persistent and significant excess of inventory relative to still-weak demand. In comparison, B.C.’s northern markets remained relatively stronger, underpinned by commodity-related economic activity.
July activity pushed year-to-date sales to just under 44,800 units, down eight per cent from same-period 2011. While the decline was due in part to stronger sales in the first quarter of 2011, same-period sales were the lowest since 2001.
B.C.’s weak pace of sales is expected to persist for the rest of the year. Tighter mortgage insurance rules in effect since early July will dampen demand, particularly for first-time buyers in the Lower Mainland.
Auto dealers recorded a second straight month of improved sales in June as more buyers jumped off the sidelines and slid behind the wheels of new vehicles.
The pace of sales in the B.C. and Territories region jumped for a second consecutive month to reach a seasonally adjusted 15,650 units, up 3.6 per cent from May. A sharp climb since the beginning of the year has pushed monthly sales to the highest level since May 2008.
While truck sales led total growth in June and have trended higher since 2009, stronger passenger car sales have propelled this year’s activity. The pace of monthly car sales has jumped more than 20 per cent since the fourth quarter.
The rising pace of new vehicle sales likely reflects factors such as early-year gains in employment, ongoing dealer incentives and low financing rates. Additionally, the low sales pace observed since the recession may have led to fewer quality used-vehicles available for sale, pushing prospective buyers into the new car market.
Total vehicle sales are forecast to rise to about 175,000 units this year, up nine per cent gain from 2011. However, year-to-date growth is forecast to narrow as the strong upswing in sales activity tempers going forward.
The global growth recession is expected to generate below-average economic growth and slower employment growth in B.C., leading to a curtailment in vehicle purchases.
Bryan Yu is an economist with Central 1 Credit Union
Original Article found at: http://www.vancouversun.com/business/Home+sales+steady+across+province/7107678/story.html