Report suggests that activity will pick up within a year despite economic turmoil of the coronavirus pandemic
There is concern that Canada’s housing market will remain damaged by the pandemic, maybe until 2022, but many Canadians are more optimistic.
A new report from RE/MAX Canada suggests that activity will return with 56% of survey respondents who are planning to engage in the real estate market expecting to do so within less than a year.
Asked when they believe the real estate market will return to pre-pandemic levels, 44% said “by 2021” with 29% expecting it to do so by the end of 2020.
RE/MAX says that its analysis of housing markets that are similar to Canada’s – such as parts of Europe – found that, in some cases, demand for homes was higher than pre-lockdown and increased from a year ago.
"The market has definitely seen a steep decline in the volume of transactions in the last few months, but in much of Canada, transactions have been happening and prices in particular have been resilient. Now that economies are beginning to re-open across the country and in light of some of the recent activity we've seen in various cities across Canada, as well as in certain European and US markets, we anticipate that demand could begin to improve much faster than we initially anticipated at the beginning of COVID-19," said Christopher Alexander, executive vice president and regional director, RE/MAX of Ontario-Atlantic Canada.
Regional variations
Real estate is regional of course, but Alexander added that some parts of Canada are already seeing more positive signs following the decimation of sales during the lockdown.
"Regions such as Toronto, Ottawa, and Vancouver are excellent examples, and are already experiencing an uptick in activity and the number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that is not nearly as dire as some suggested," he said.
Nationwide, as restrictions ease, market activity is already on the upswing with the Canadian Real Estate Association’s May 2020 data revealing national home sales up 56.9% from April, with the number of newly listed properties up 69% month-over-month.
However, CMHC recently announced tighter underwriting restrictions which may have a negative impact on the housing market.
RE/MAX Canada estimates relative price stability by the end of 2020, with a possible price correction in the single digits. The exceptions include regions such as Alberta and Newfoundland, which are still struggling to rebound from a host of shocks, the dive in resource revenues, and the potential for a second wave of COVID-19.
