B.C.’s housing market will take an initial a sharp dive due to the coronavirus-driven recession, but it is expected to recover next year, according to the B.C. Estate Association (BCREA).
Sales throughout the province are forecast to slide by 30 per cent to 40 per cent this month compared to April 2019, as people follow social distancing protocols, Brendon Ogmundson, chief economist for the BCREA said.
But Ogmundson expects B.C. will see the pace pick up and a return to its baseline number of sales of 85,000 units per year by early 2021.
An analysis of the impact and recovery of three recessions in Canada in the past 40 years give a clue to the future, he said.
“One of the things we find is that the shape of recovery is pretty similar. All of these recessions have different causes, different durations.”
“As measures to mitigate the spread of COVID-19 are gradually lifted, we expect that pent-up demand and low interest rates will entice buyers back into the market,” he said in the association’s market intelligence report.
The current situation is closer to a natural disaster, he said.
This recession was not human-made and may not last as long as others, he said.
When it comes to home sales, much of the business is normally carried out face-to-face. Real estate agents have set up ways to continue, offering virtual open houses and electronic documents, for example.
“Still, a lot of that transaction activity is about being out. And across every market we are expecting to see a pretty big decline in April as the real estate industry and families across B.C. adhere to what they are supposed to be doing.”
All markets in B.C. can expect a “pretty big decline” in sales in April, Ogmundson said.