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He explained that while about half of the 1,200 workers in the local banquet hall industry are younger people who come in seasonally, looking to make money to pay for rent or tuition, the other half are between the ages of 30 to 45. They are chefs, banquet hall supervisors, event coordinators, and booking managers.
“These are those people that are looking forward to buy or get into a townhouse, whatever it may be, or buy a car. How are they going to do that now?”
His views are being echoed by a new report by the B.C. Real Estate Association’s chief economist, which says “this isn’t a typical recession” and that home prices are on an unexpected and swift rebound because, while the pandemic has slammed some parts of the economy, many jobs in higher-wage sectors haven’t suffered.
In fact, some households have been able to save more than they usually do because they aren’t shopping or eating out as much, and also not taking vacations. “The Canadian household savings rate climbed to a record high of 28.2 per cent in the second quarter of 2020, eclipsing the previous record of 21.2 per cent in 1982,” wrote BCREA chief economist Brendon Ogmundson.
The backdrop for this, however, is a high-profile clash between the real estate industry and the Canada Mortgage Housing Corp.’s prediction that declines in household income and employment could mean home prices are headed for a significant and prolonged drop.
The CMHC, which has tightened underwriting policies for high-ratio borrowers, has also been vocal about the danger of fuelling the stress of home ownership in expensive markets for buyers with uncertain financial prospects in a weak economy.
