The Impact of COVID-19 on Vancouver’s Real Estate Market
Residential home sales in Greater Vancouver experienced a 40% decline last month for same period last year and a 56% decline from the previous month. April’s sales were a staggering 63% fall from the 10 year April sales average and it was the worst April since 1982. Inventory levels continue to be constrained and were 35% lower than the same period last year.
Normally this decline in activity would put significant downward pressure on prices but given the decline in the inventory and the low interest rates home prices have remained stable.
Toronto’s April stats were even worse than Vancouver. Sales and listings there fell 70% and 64% respectively. Similar results were experienced in both Edmonton and Calgary.
The impact from COVID-19 on Real Estate was expected and many economists believe the real estate market will roar back before the end of this year. The overall economic impact of COVID-19 will be very significant. Nearly three quarters of all businesses have had a significant impact to their revenue and many businesses will not be able to maintain their services. It’s too early to know the full extent of the impact but it’s expected that many businesses will not be the same when things return to normal.
Mortgage rates have pushed lower, but only very modestly. Variable rate mortgages are as low as 2.25% and 5 year fixed as low as 2.54%. Banks are currently being very cautious with mortgage lending as they adjust to the new economic environment. Borrowers should ensure their 2019 taxes are filed and have all supporting documents available before applying. On the private lending side many lenders have backed off and are not near as aggressive as they were a few months ago. That being said, I still have plenty of lenders that are able to accommodate most loan requests.
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