The B.C. Real Estate Association's latest housing forecast was released Tuesday and shows that while sales in 2020 did fall to "historic lows" in April, they have since rebounded to pre-pandemic levels and even puts the year on track to outdo 2019 sales.
Among the industries still grappling with the impacts of COVID-19 this year, the B.C. housing market is not one of them.
The Canadian real estate market dipped in April this year, amid the lockdowns and economic impacts brought about by COVID-19. Although the pandemic stopped what was predicted to be a strong spring 2020 market, transactions started to pick up around May and June.
The B.C. Real Estate Association’s latest housing forecast was released Tuesday and shows that while sales in 2020 did fall to “historic lows” in April, they have since rebounded to pre-pandemic levels and even puts the year on track to outdo 2019 sales.
The association’s third quarter forecast report predicts 82,380 home sales by year’s end, a 6.5 per cent increase over 2019’s 77,351 residential home sales. The average home price is also forecast to rise 7.7 per cent this year and 3.7 per cent in 2021.
Canadians showing more interest in suburban and rural homes for sale, as work and life dynamics shift
While that seems contrary to the state of the economy, the BCREA’s report notes that COVID-19 job losses have largely been experienced by lower paid, frontline service workers that typically make up a younger demographic, while those in higher-earning jobs – who drive home ownership – have seen their employment recover. That, coupled with record-low mortgage rates and buyers seeking more space at home, have prompted a burst of sales activity that had been paused in the early weeks of the pandemic. The pandemic has prompted many Canadians to reassess their living situations.
According to a survey conducted by Leger on behalf of RE/MAX Canada, 32 per cent of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group. Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44 per cent of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
And although recessions, job losses and decreased income have historically forced home owners to sell — leading to a higher supply of available homes — physical distancing, reluctance to move during a pandemic, and mortgage deferrals have also slowed housing supply throughout the spring.
As a result, many B.C. markets are now seeing rising home prices despite the province’s continued struggle with COVID-19 and pandemic recovery.
The BCREA is also predicting 2020’s sales will set up 2021 for another year of continued growth, with a possible 17.6 per cent increase up to 96,860 sales next year.
Western Canada Housing Market
While COVID-19 lockdowns in March and April slowed down the housing market in Western Canada, transactions in Kelowna, Saskatoon and Vancouver resumed by May, with sales in both May and June surpassing year-over-year levels. Many buyers put their plans on hold at the peak of COVID-19 lockdowns, but they returned to the market quickly to make up for lost time.
Edmonton’s housing market quickly bounced back to pre-COVID levels in June, while Saskatoon experienced its busiest June in years; this momentum is anticipated to continue into the fall market, with brokers and agents estimating a three-per-cent increase in average residential sale prices for the remainder of the year.
Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey.