VANCOUVER -- Buying and selling real estate involves a lot of personal interaction, but COVID-19 has put a stop to that. There are no more open houses, property owners don’t want strangers in their homes and buyers aren’t out and about viewing listings.
A new RBC economic report says the pandemic is a temporary blow to Canada’s housing market. The report projects housing sales across the country will dive by nearly 30 per cent this year to a 20-year low.
The chief economist with the B.C. Real Estate Association, Brendon Ogmundson, had released his own predictions a couple of weeks ago and isn’t too surprised by what’s in the RBC forecast.
“We're expecting a recession. We're expecting at least a one or two month real stoppage of activity, and for the housing market that means not a lot of face-to-face interactions, (and) probably not a lot of sales the next few months," Ogmundson said.
According to RBC, property prices are expected to fall briefly in the second half of this year by about 3 per cent. However, affordability in the Vancouver area still remains a problem. While the pre-tax median household income to housing costs ratio has fallen about six percentage points in the region in the past year, it’s still the highest in Canada at 80.4 per cent.
Ogmundson doesn’t expect a lot of change in housing prices in the Vancouver area because both supply and demand have fallen off.
The housing forecast from RBC is also predicting that once the crisis has ended, there could be a 40 per cent surge in real estate sales next year.
"All that demand is really still there. We just need to get past this current kind of unusual situation," Ogmundson said, "A lot of those jobs hopefully will be coming back and we'll be coming back into very low interest rates and a lot of pent up demand. We should see a pretty big bounce back once this does end."
