British Columbia’s labour market picked up in December with a 0.5-per-cent gain following a flat November. This translated to 14,100 more people working compared with the previous month. That said, labour market patterns have weakened, with year-over-year hiring trending lower to a dismal 0.2 per cent. December’s increase was well below the national performance of two per cent. The unemployment rate rose to six per cent from 5.7 per cent in November, as B.C.’s labour force expanded by 0.7 per cent to a level above employment growth.
Part-time employment growth offset a full-time employment decline of 0.3 per cent or 7,400 people. Part-time employment grew by 3.8 per cent or 21,500 people.
By sector, the services-producing industries led the increase in employment, with an overall 0.7-per-cent increase, offsetting the 0.3-per-cent decline registered among goods-producing industries.
In the Lower Mainland housing market, home sales nudged lower at the end of 2024 but retained momentum. MLS sales reached 2,686 units in December—according to local real estate board data—which was 27.5 per cent higher than last year, albeit a decelerated pace of growth from November’s 29 per cent increase. Seasonally adjusted sales fell by 3.2 per cent month to month after three consecutive months of gains. They remained 15 per cent higher than the mid-year trend, and Q4 sales reached their highest level since Q2 2023.
The late-year sales upswing is due to the accumulation in pent-up demand over the past couple of years, which was constrained by low affordability and high mortgage rates. Bank of Canada rate cuts, and a material reduction in fixed rates over several quarters, moved some prospective buyers off the sidelines. More recently, high-priced markets such as the Lower Mainland saw interest due to the announced increase in the maximum price threshold for mortgage insurance to $1.5 million from $1 million, and the availability of 30-year amortization products for all first-time home buyers and new-build buyers.
Buyers also benefitted from an increase in product availability, with new listings up about 40 per cent year over year, particularly in the Fraser Valley. However, higher sales limited growth in month-end inventory. The sales-to-active listings ratio has firmed up over the past quarter and is now at 17 per cent, which is well within balanced conditions. This puts a sellers’ market within reach.
The average price Lower Mainland home price reached $1.203 million in December, up a robust 5.4 per cent from a year earlier, although this increase is partly due to base effect. On a seasonally adjusted basis, the average price rose one per cent. On a full-year basis, Lower Mainland sales ended up about one per cent from 2023, reaching 40,430 units. The average price increased by 1.6 per cent to $1.204 million. This marked another weak year, consistent with the low points of the last 15 years, despite robust population growth. We expect higher sales and prices in 2025 as pent-up demand continues to lift sales, supported by more favourable financing conditions. Younger households will also be supported by ongoing wealth transfers. Home prices are expected to rise given the limited supply of housing and weaker construction trends for ownership housing.
Bryan Yu is chief economist at Central 1.
