Canadian employment declined from the previous month, with the economy losing nearly 42,000 jobs (-0.2 per cent) to 21.173 million in August. The employment rate fell 0.1 points to 60.8 per cent, while the unemployment rate was unchanged at 6.4 per cent. Average hourly wages rose 2 per cent year-over-year to $37.02 in August.
Employment in B.C. decreased by 0.2 per cent to about 2.949 million, with the provincial economy losing about 5,500 jobs in August. Employment in Metro Vancouver rose by 0.7 per cent to 1.719 million. The unemployment rate in B.C. rose by 0.3 points to 6.5 per cent, while Vancouver's unemployment rate rose by 0.5 points to 6.5 per cent in August.
August’s jobs report gave back some of the employment gains recorded over the previous three months, demonstrating the volatility that has challenged the labour market over the past few quarters. Despite relatively consistent drawdowns across different sectors in August, the Canadian economy still added over 50,000 jobs on a cumulative basis over the summer, climbing into positive territory year-to-date with July’s strong report. Resilience in the labour market since February and a resurgent second-quarter economy are biasing toward eventual rate hikes from the Bank of Canada, which has held its policy rate at 2.25 per cent since October 2025. Further, the persistence of the Iran conflict and its oil price shock along with new bilateral tariffs with the US cast inflationary pressure on the economy. Taken together, we expect monetary policy to remain unchanged this year, before the Bank raises its policy rate in 2027 toward its neutral level of 2.75 per cent.
Implications for the Real Estate Market
The August employment report presents a mixed but generally supportive outlook for the Canadian and B.C. housing markets. While the loss of nearly 42,000 jobs nationally and the increase in B.C.'s unemployment rate to 6.5% could weaken consumer confidence and reduce some buyers' willingness to make major financial commitments, the broader labour market has remained relatively resilient over the summer.
For the real estate market, the most significant implication is likely the impact on interest rates and borrowing costs. The expectation that the Bank of Canada will keep its policy rate unchanged through the remainder of 2026 provides greater certainty for prospective buyers and existing homeowners. However, expectations for rate increases beginning in 2027 could encourage some buyers who have been waiting on the sidelines to enter the market before borrowing costs potentially rise.
In British Columbia and Metro Vancouver, the picture is particularly nuanced. Despite B.C. losing approximately 5,500 jobs overall, Metro Vancouver added employment during the month, suggesting continued economic resilience in Canada's largest housing market outside Ontario. However, rising unemployment could continue to make buyers cautious, particularly in higher-priced markets where affordability remains a significant challenge.
Overall, the employment data is likely to support a continued balanced and selective real estate market in the near term. Stable interest rates should provide some support for housing demand, but softer employment conditions and elevated unemployment may limit urgency among buyers. As a result, buyers are likely to remain price-sensitive and selective, while sellers may continue to face longer selling periods and greater competition.
Looking ahead to 2027, if the economy remains resilient and the Bank of Canada begins raising interest rates as anticipated, the window of stable borrowing costs could gradually close. This could potentially bring forward some housing demand in late 2026 or early 2027, although the ultimate impact will depend heavily on employment conditions, inflation, mortgage rates, housing supply, and consumer confidence.
