Canada’s spring house hunting season — typically the busiest time of the year for home transactions — will be effectively cancelled this year.
The strict social distancing measures that are critical to the fight against COVID-19 will make it all but impossible to follow through with the activities that the conventional home sales process necessitates.
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That’s the takeaway for the near term Canadian housing picture from RBC Senior Economist and housing market expert Robert Hogue from a thought leadership piece published earlier this week.
“We expect realtors to suspend open houses and cut any private showings to a bare minimum,” he wrote. “There will be plenty of reasons for sellers to wait and see as well. A shock like this one is an inauspicious time to get full value for a property. We expect for-sale inventories to shrink, which will further contribute to stall activity.”
While the outlook for the spring months is bleak, Hogue delivers some much appreciated optimism about a timeline for a housing market recovery. This message is you shouldn’t expect activity to resume overnight, but RBC is currently “penciling in” an early summer “restart.”
Of course, as with all things during this uncertain period, the exact timing is highly dependent on the duration of the COVID-19 crisis and how soon the strict measures are lifted or gradually relaxed.
“We think the recovery will come in stages — taking buyers up to a year to regroup and rebuild confidence amid high unemployment,” wrote Hogue.
Even in an optimistic recovery scenario, Canadian home sales will take a huge hit on the year, with Hogue projecting a nearly 30 percent dive as sales reach a 20-year low at the national level. But looking to 2021, the economist sees a massive sales surge on the horizon when the “temporary shock” of the pandemic sits comfortably in the rearview mirror.
“Exceptionally low interest rates, strengthening job markets and bounce-back in in-migration will generate substantial tailwind. We project home resales to surge more than 40% to 491,000 units in 2021,” wrote Hogue.