There’s an age old expression that’s true much of the time, and it’s that the truth is usually somewhere in the middle. Real estate is always a hot topic here in British Columbia, and it’s at the least a fairly warm one no matter where you are in Canada. Here we’ve had so many different industry insiders predicting the worst for the market, and included in that is an expectation that home prices will fall in Vancouver.
It’s definitely been quite the polarizing subject of discussion, with those on one side enthusiastic at the thought of lower housing prices, while the less selfishly minded being concerned about what plummeting values might do for the equity that hard working people have built into their homes over a long time. And then of course there are the realtors who work in the city who also have a very vested interest in seeing house prices maintain some measure of stability.
Here at Real Estate Leads we are entirely in the know about how this is very much front and center for a lot of people, and we will take every opportunity to promote our online real estate lead generation system for Canada as a way in which realtors can better position themselves to obtain new clients in a new reality where those clients aren’t as easy to come by as they once were. Truth is, however, real estate has always been a very competitive business and there are always going to be many chasing after a few in this regard.
But back to topic – the good news for those who wish to see more positivity in regards to the real estate market in Vancouver is that recent information is indicating that housing prices for properties in the city will NOT be going down considerably in response to the economic chill that’s coming with the COVID-19 economic uncertainty.
Rents Go Down, Home Prices By and Large Don’t
The benchmark price of a property in Greater Vancouver has essentially remained constant — going from $1.02 million in February to $1.03 million in May, and indicating that the supply and demand equation HAS insulated the market here in the exactly the same way experts suggested it would.
There is evidence to suggest the price of rentals has dropped in the last three months, but that’s not been the case for the ownership of homes. What we can safely assume here is also what certain industry experts were saying – that people most impacted by the economic downturn weren’t the same people who would have the financial means to make moves in Vancouver’s housing market to begin with.
For higher income individuals still in the market – and the nature of Vancouver means there’s plenty of them in this category – it’s likely they were still going to be in the market regardless of what might have happened.
One thing that may take a bite of the market is there may be fewer qualified buyers going after properties and contributing to ‘sold well above asking’ trend that’s been so prevalent in Vancouver and Toronto over the years.
(And while we’re on that topic – Toronto realtors, the same supply and demand factors are going to be insulating the market and benchmark home prices in the same way)
The biggest part of that is going to be lower levels of immigration, and the extent of that influence remains to be seen. However, economic predictions counter that somewhat and all of this seems to be borne out by what’s being reported by the CMHC (Canada Mortgage and Housing Corporation).
Possible Marginal Dip in Future
On Monday, they released a housing outlook that predicts the lower range for the average home price in Metro Vancouver may fall from $892,790 in 2020 to $809,215 by 2022. The belief here is that average house prices will decline with weaker household budgets and the uncertain nature of the economic reopening.
With all of this, however, they did state that Vancouver’s ownership markets are less vulnerable to Covid-19-related downturns, and we can safely assume this is going to apply to Toronto too. Keep in mind as well that real estate buyers tend to be older than renters and as a result are less likely to have become unemployed or less-employed as a result of the forced economic downturn.
One more thing we should also consider is that the ‘new’ reality that comes to be once the global pandemic comes to an end may mean an entire revisioning of what the ‘work’ world is, and part of that may mean greater numbers of people no longer being required to live in major metro areas for work. This has the potential to vitalize real estate markets and new builds in other areas of the country, and this will have a hugely beneficial influence for realtors working in smaller communities across the country.
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