How is British Columbia Doing with COVID-19?
We are one of the best regions in the world in terms of controlling the spread of COVID-19. We reacted well and quickly, and with the necessary measures taken, we were able to show a substantial improvement in the fight with the spread of the virus.
The below graph shows how well we did, compared to the countries in the world. The flat growth line has become a great indicator for us in British Columbia to be able to plan for normalization more strongly.
Economic Impact of COVID-19
The growth rate of the overall economy plummeted, with -3% and -10%, respectively, in March and April. Unemployment figures reached a record of 13.5% in British Columbia.
There were are a high number of job losses, focusing on the sales and service industries and the age group of 15-24. These are the people that worked in the retail and hospitality sectors.
Vancouver’s city movement figures came down to a 25% level from the previous values of 80%.
These reflect the severe impact of the outbreak. The conditions were unprecedented, and it took time for the market and the people to adapt. However, even under these conditions, the real estate market reacted well and quickly, showing the signs of its strength and depth.
Real Estate Market
COVID-19 has created a significant impact on the market so far. However, there are good indicators about how the housing market reacted to the unique conditions that the outbreak has caused. So the outlook of the market may not be as bad as it was expected. Here are some figures that would give a better idea of the market and the projections.
To start with, the sales of the houses decreased by as much as 50%, in March and April. Following the social distancing and business closure measures. The highest impact was in April 2020. However, by the second half of May, we saw a definite improvement in the activity in the market. Daily sales figures almost doubled in this period, with a continuation in June.
Additionally, we have not seen a drop in the prices despite the extreme market conditions. Although there are small variations based on the housing type and region, overall, the prices were stable all through this period. You may check the details from our May 2020 Real Estate Market Update. In this update, you can find the sales, the number of listings and price details on the city level, which will give you a clearer picture.
Finally, the businesses and individuals got powerful support from the government in this period, which helped to overcome the profound impact of lockdown. The government allocated funds at the level of 9% of GDP to help prevent unemployment and bankruptcies. This number compares to 3-4% of GDP level in the previous crisis periods, like the one in 2008-2009. So the support was quick and impactful.
Get Better Sooner?
As a result of the figures mentioned above and market reactions, we can make more optimistic projections. The Real Estate Board of Greater Vancouver has prepared a model to predict the market’s getting back to the previous usual trend. Based on this model, the market would get back to the earlier directions, by around the summer of 2021. However, May and June figures may cause an update on this modelling, with the assumption and hope that we will not have a strong second wave of COVID-19 outbreak.
What to Expect in Summer 2020 and Onwards
All the above-mentioned economic figures reflect the powerful and sudden impact of the outbreak. However, analysts expect that positive growth figures will replace these high figures of negative growth in the following months. The economy is estimated to grow by a positive 3.7% in 2021 after the negative growth of 6% in 2020.
The restaurants are now opening as well as many retail shops. Although we are not expecting the previous levels of business for a while, we will probably see an improvement each month.
In the real estate business, we have always seen an increase in prices following the crisis periods. Until now, the house prices were pretty flat anyway, and the signs show to keep the momentum. With the help of the mortgage deferral option (which the borrowers did not choose to utilize as much), we did not see defaults, which would possibly cause price pressure.
May and June’s figures show a strong normalization in terms of sales and the number of listings already. Although the market activities such as open houses are not exercised, the realtors have improved other secure and practical ways of communication, such as virtual tours. These tools even helped a higher number of people to see the properties when organized effectively.
In conclusion, we are now more optimistic about the overall economy and especially the real estate market. The industry plays a very impactful role in British Columbia’s economy, and improvement here will lead to a quicker normalization of our lives.
It is of utmost importance, though, not to cause a strong second wave of COVID-19 outbreak, with the maximum effort to keep ourselves and our families safe by following the guidelines of the health authorities.
Stay Healthy, Stay Informed.