The Canadian housing market is showing clear signs of recovery from the impact of the COVID-19 pandemic. As expected, Vancouver real estate is playing a big part in sustaining this revival.
Data from the Canadian Real Estate Association (CREA) shows that although sales and new listings initially declined nationwide due to the pandemic, they appear to be experiencing a slow increase.
Even though sales of residential properties in Canada were nearly 40% lower in May than the same month in 2019, sales did increase by 56.9% from April. It’s important to note, however, that April sales were the lowest on record, and May sales were the lowest they’ve been since the mid-1990s.
Nationally, the average price for homes sold in May was $494,500, marking a 2.6% year-over-year decrease. Still, in a recently released statement, Shaun Cathcart, senior economist with CREA, noted that “prices appear to be holding firm at this point.”
Home sales in major cities like Vancouver and Toronto heavily influence national figures, primarily because they are Canada’s priciest and most active housing markets. For instance, if these two markets were excluded, the national average home price would be substantially diminished by about 94,000 to $401,000.
On this note, May data shows clear signs of recovery for Vancouver real estate. According to the Real Estate Board of Greater Vancouver (REBGV), the benchmark home price in the area was $1,028,400 – almost unchanged from the previous month, but 2.9% higher compared to May 2019. Home sales here decreased by 43.7% from a year ago but increased by 33.9% relative to April numbers.
New listings also saw a boost from last month, of 59.3%. As REBGV Chair Colette Gerber stated:
“Home sale and listing activity is down compared to typical, long-term levels and up compared to the activity we saw in April 2020. Home buyers and sellers are adapting today, becoming more comfortable operating with the physical distancing requirements that are in place in the market.”
Stats for B.C. Overall
B.C. overall is also showing signs of improvement. According to BCREA, there were 4,518 residential home sales in the province last month, down by 45.2% from May 2019, but up from the 3,284 sales seen in April 2020.
The dollar value of homes sold in B.C. declined to $3.3 billion due to decreasing year-over-year sales, marking a 43.5% reduction from 2019. The average home price, however, recorded a slight 3.2% increase.
Last month also saw new listings pick up a bit again, although the total number of listings was 24% below the figures from May 2019. B.C. Real Estate Association (BCREA) chief economist Brendon Ogmundson noted in a recent report:
“There were encouraging signs of recovery in May. While activity is still far below normal, both sales and listings are up significantly from April’s lows.”
What’s to Come
Douglas Porter, chief economist and managing director at BMO Financial Group, predicts that significant changes in national housing prices are not to be expected – if there were a drop in prices, it would likely not be more than 5% across the country. As well, he feels that a more balanced market will result from the impact of the COVID-19 pandemic.
As B.C. starts to reopen more of its economy, implementing new procedures to protect buyers and sellers, and as low interest rates continue to be available, real estate markets should come alive again. Vancouver, in particular, is starting to regain its momentum, with national figures following suit.
Sources: Times Colonist