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COVID-19: REAL ESTATE DROP

13 May
Leo Chrenko May 13, 2020 0
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Huge drop in real estate sales in Canada

As social distancing rules and regulations currently stand, real estate agents will experience a harder time finding buyers and selling homes. Home sales are expected to drop by around 30 – 40 percent for the month of April alone. That is not including the fact that home sales are expected to remain a depressed market from the start of the outbreak, to the end of the summer months as well. This definitely creates hardship for those in the housing and real estate sales market currently.

According to the B.C. Real Estate Association, the 2020 recession that has been driven by the COVID-19 pandemic will be a harsh and deep one. Other Canadian economic downturns are predicted to last longer than the housing market depression.

However, once safety and health concerns drop down from the elevated levels we are experiencing now, and the regulations for social distancing in place during the pandemic get lifted, real estate agents are hopeful that home sales will once more become a profitable market again.

It is predicted that the first quarter of this year, the Canadian economy will see a decline of around 4 percent. This is expected to be followed by a steep 21 percent decline in the second quarter of the year. This is based off of a seasonally adjusted annualized basis. It is also predicted that the Canadian output of home sales will hit a low likely to be around 7 percent. After which it is hopeful the economy picks back up and begins growing again at a normal pace, and that the numbers reach their original normal range.

The housing market usually bounces right back after recessions without fail. This is found by looking at historical reports for the housing market. These same reports say that with the current interest at historically low rates and a lot of pent up demand, the housing market is in no danger of not recovering next year. Because of the recession not being of man-made origin as it was unprecedented which made it unable to be prepared for, as well as being considered as ‘an act of God’, the economy will bounce back rather quickly. This leaves Canada in rather good standings for the housing market. This means that there should be no fear for potential home buyers, or potential home sellers, during this time. There are still chances to take advantage of the current state of the market and of the economy during this time. It is still very likely that someone will be able to buy or sell a home with little to no issues, outside of a few current economy driven ones, more than what’s normal.

Real estate agents are hoping that low interest rates, and a decent amount of demand, the number of home sales will recover heavily. Not just in sales but also in prices.

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