About two weeks back, the outbreak of COVID-19 hadn’t impacted Vancouver’s real estate market, at least not in any negatively tangible way.
The spring real estate market looked to be recovering. Open houses were well attended, and a few townhouses and condos had sold for over the asking price. Low supply and high demand had an impact on the market, particularly the condo section, which has rebounded since the slump. Even houses in the luxury market had shown some movement.
Part of the reason for this was, in fact, the outbreak. Banks around the world cut interest rates to cushion the economic blow caused by COVID-19. In March, the Bank of Canada cut rates by a full percentage point. Lower mortgage rates increase the amount of a home buyer can borrow, which means more equity to invest in a home. Coupled with the incoming, more relaxed rules of the mortgage stress test, many buyers were poised to re-enter the once-stagnant housing market.
That being said, the market is fickle. The long-term economic ripples of COVID are far-reaching, and the housing market certainly isn’t immune. As all financial markets are connected, panic selling and buying have impacted financial portfolio holdings. The result is that mom and dad may no longer have the liquidity to help their children invest in a home.
More significantly, the wide-reaching shutdown of services, retailers, and other businesses to curtail the spread of the virus has resulted in a tremendous loss of income, which means people have fewer resources to invest—or may not be able to successfully secure a loan. Overextending a budget is never a good idea, and buyers should be cautious to avoid long-term financial burdens.
Home sellers, on the other hand, could potentially leverage limited listing to their advantage and sell quickly. While real estate boards in Vancouver, Toronto, and Ontario are being urged to suspend activities like open houses, a few of the more innovative real estate agents are offering digital advertising, videography, virtual reality tours to proactively service assist clients while following government mandates for social distancing and isolation to curtail the spread.
Numbers show that overall sales between March 1 and 19 were up year over year. Vancouver’s luxury market rebounded in the first two months of the year, and sales across condominiums, townhouses, and single-family homes respectively surged 65%, 109% and 79% year-over-year.
While the anxiety, prudent financing, and the overall caution generated by COVID-19 may slow market recovery, the Canadian real estate market is facing turbulence from a solid foundation. Simply, put people want to live in cities like Vancouver, Toronto, and Montreal. And while the market may be facing short-term pain, the long-term prospects of Canadian real estate remain entrenched and solid.
SELLING A TOWNHOUSE IN VANCOUVER?
As an experienced Vancouver townhouse realtor, Ariane Benjamin focusses on the purchase and sales of townhouses in Vancouver Proper. Her one-on-one approach exemplifies a customer-first attitude, allowing her to deliver greater results and value while coordinating swift, smooth transactions. Need to discuss a property? Schedule a complimentary consultation to experience what’s made Ariane an expert in her field for over 16 years. Call (604) 779-1500 to get started.