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Rising Unemployment Rates Having Impact on Large Housing Markets in Canada

Published May 5, 2020 by Real Estate Leads

It’s not surprising that being well more than a month into the COVID-19 lockdown we’re starting to see how the way so many people have become unemployed or underemployed is making ripples in the housing market. The reality is that over the next few years there’s going to be fewer qualified (or willing) buyers bidding on homes because so many people will be adjust to new income-earning realities.

The direct correlation for this as it relates to realtors is that this means there will be fewer prospective clients out there, and while that will be truer for home buyer clients there will also be fewer people putting homes on the market due to decreased values that may only be temporary.

One way to counter this dip in client numbers will be to make use of our online real estate lead generation service here at Real Estate Leads. It harnesses the power of Internet marketing in a way that determines if a person taking interest in the real estate market has the makings of being one who may genuinely make a move in the near future. It’s great for getting more out of your client prospecting efforts.

But back to topic, it’s actually in the larger and more popular housing markets in Canada where this is starting to be seen. Again, not surprising as this will be where the greatest number of gainfully employed people will be living as that’s where the jobs are.

Significant Declines

So here we are with unemployment having a disproportionate impact on the country’s largest housing markets. The employment sector across the country dropped 5.3% from February to March, and that’s a representation of more than 1 million lost jobs being lost. Accordingly, the unemployment rate went up to 7.8%, and part of that being a record-high 2.2% monthly jump.

Now where this is most problematic is in the sharp downturn in employment in the private sector (- 6.7%), a rate nearly that’s close to double the public sector ( – 3.7%).

From Stats Canada – unemployment increased by 413,000 cases ( up 36.4%), and this is primarily due to temporary layoffs. In addition, 193,000 is the number of Canadians who had worked recently and were willing to but failed to meet the official definition of unemployed.

March figures from the same report also show that unemployment rates in Toronto, Vancouver, and Montreal have gone up rapidly in the last month, and the connection between this trend and the very detrimental socio-economic effects of the COVID-19 pandemic are becoming very clear.

At the end of March Toronto’s unemployment rate stood at 7.8%, an 11.42% increase annually. Vancouver was much the same, with its share of unemployed workers going up by 68.89% year-over-year to reach 7.6%. This is in quite the contrast from the numbers traditionally associated with the West Coast hub city’s robust labour sector.

The worst case here is for Montreal, which suffered the highest unemployment rate last month, Their rates went up 51.67% annually to end up at 9.1% overall.

It’s going to be more than just something of a rocky road when it comes to economic recovery re-buoying the housing market, but as always it will be the professionals who have the means to dig deeper and think outside the box when it comes to real estate that will be keeping the success of their business relatively intact.

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