This observation is based on several of the metro area’s key economic indicators and is consistent with the Conference Board in Canada’s latest September Metropolitan Outlook.
First, following a relatively modest 0.9% year-over-year increase in the first ten months of 2014, full-time employment in the metro area is up 2.5% year over year in the first ten months of 2015.
The fact that this gain in full-time hiring was accompanied by a 5% decline in part-time hiring suggests that employers, faced with an increasing volume of business, are more confident about taking on full-time staff. Across industries, employers in both the goods and in the service sectors added staff, led by health services, business services and construction. Also, employment in the manufacturing sector should benefit from increased hiring by Seaspan related to their contract to build non-combat boats for the federal government.
Driven in part by a combination of near record low interest rates, sustained net migration and the above-mentioned growth in full-time hiring, existing home sales in Vancouver are expected to total 42,200 units in 2015, their highest level since 2005.
Probably the best indicator of the relative strength of demand for existing homes relative to supply is the steady up trend in the sales-to-listing ratio from 48.8 in early 2014 to 79 in October, its highest level since July of 2009.
Also reflecting the relative strength of housing demand vis-à-vis supply, the Composite MLS House Price Index was up by 15.1% year over year in October compared to 6% year-over-year in the same month a year earlier.
Fuelled by the combination of strong home sales and rising prices, housing starts in Vancouver are ahead by 9% year-to-date due to thecombination of an 8% year-to-date rise in single starts together with a 15%year-to-date rise in multiples.
Further, given the shrinking inventory of homes for sale plus the fact that the volume of residential building permits approved inVancouver in the first nine months of the year are up by 28.7% compared to the previous year — as a result of a 36.2% year-to-date rise in multiples, a 14.1%year-to-date increase in row units and a 7.2% rise in singles — suggests that starts will remain strong well into 2016.
While as noted above the outlook for Vancouver residential construction is quite positive, there is evidence that the prospects for non-residential construction in the metro area have improved significantly since the beginning of the year.
Following little change in 2014, non-residential building approvals in the first nine months of 2015 are up by a very healthy 35.2% due to strength in industrial (+36.7%), commercial (+24.4%) and institutional(+81.6%).Major projects likely to contribute to this strength include the recently started Trump International Hotel and Tower, the expansion of the Vancouver International Airport, the Rogers Arena towers and the Great Northern Way Campus, Emily Carr University.