employment boom reshapes outlook for developers and land valuations
Canada’s labour market demonstrated unexpected strength in December 2024, adding 90,900 new jobs, the largest monthly increase in nearly two years. The gain—more than triple economists’ forecasts of 25,000—was concentrated in full-time employment and contributed to a decline in the national unemployment rate to 6.7%.
This surge suggests a broad-based recovery across sectors, reinforcing the view that Canada’s economy is entering a new phase of expansion. For real estate developers and investors, this signals increased confidence in long-term growth prospects, especially for residential, commercial, and industrial development.
implications for inflation and interest rates
While strong employment growth typically raises concerns about inflation, wage growth remains moderate, with average hourly wages for permanent employees increasing by only 3.7% year-over-year. This has somewhat dampened inflationary pressures and may allow for a more measured monetary policy response.
Prior to the release of December’s job data, markets widely expected a 25 basis point rate cut by the Bank of Canada to counterbalance slowing GDP growth. However, the surprising strength in employment has lowered the probability of an immediate rate cut from 70% to 61%, according to economist forecasts. The Bank may now choose to hold its current policy rate steady, balancing inflation control with economic momentum.
mixed results in british columbia
Employment in British Columbia rose by 0.5% in December to 2.844 million, driven by a gain of 14,000 jobs. However, this provincial growth diverged from the national trend in key urban areas. Employment in Metro Vancouver declined slightly by 0.1%, bringing total employment in the region to 1.601 million. The unemployment rate rose by 0.3 percentage points in B.C. (to 6.0%) and 0.2 points in Vancouver (to 6.5%).
Year-over-year, provincial employment was up just 0.2% compared to December 2023, highlighting ongoing regional disparities. Developers and landowners in B.C. should monitor these local trends carefully, as they may affect both demand projections and the viability of future projects.
unemployment in British columbia
broad-based industry recovery underway
Twelve of the sixteen industry sectors measured by Statistics Canada posted job gains in December, pointing to a recovery that is not limited to a few high-performing sectors. This follows a similarly strong report in November, suggesting that the Canadian labour market is building consistent upward momentum.
Such widespread employment gains often correlate with increased household formation, business expansion, and rising demand for new space—all of which have direct implications for land valuation and development activity.
interest rate outlook: moderate cuts expected in 2025
Despite the strong job growth, the Bank of Canada is still expected to cut its policy rate twice during the first half of 2025, followed by a pause to assess inflation trends and broader economic conditions. This anticipated easing cycle—albeit slower than previously forecast—could lower borrowing costs for developers and incentivize investment in high-potential sites.
However, developers must also remain mindful of potential cost escalations tied to inflation and wage pressures, particularly in regions with tight labour markets or high construction demand.
employment gains and unemployment rates
| Region | Employment Change | Employment Level (millions) | Unemployment Rate | Change in Unemployment Rate |
|---|---|---|---|---|
| Canada | 90,900 | N/A | 6.7% | –0.2% |
| British Columbia | 14,000 | 2.844 | 6.0% | 0.3% |
| Metro Vancouver | –0.1% | 1.601 | 6.5% | 0.2% |
conclusion: opportunity with caution
For real estate developers, Canada’s December employment report signals renewed economic strength and a cautiously optimistic outlook for 2025. Rising employment typically drives land values higher and supports demand for new development. However, regional variability, interest rate uncertainty, and inflationary pressures continue to pose challenges.
Strategic planning, careful site selection, and a nuanced understanding of local conditions will be essential to successfully navigating this shifting economic environment.
historical context and long-term outlook
(Update May 2025) It’s worth remembering how much the broader economic landscape has shifted in just a few months. Prior to the Trump presidency, Canada’s real estate and labour markets were enjoying strong, stable growth, with predictable interest rates and consistent investor confidence.
Since then, the ripple effects of global volatility—trade tensions, pandemic disruptions, inflationary spikes—have redefined the playing field for developers and landowners. But cycles evolve. The fundamentals that made real estate a cornerstone of long-term investment remain intact. With clarity, patience, and the right timing, the path forward can still offer strong returns and renewed momentum.
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