The pandemic is hitting Vancouver Island’s real estate market hard.
Sales of single-family homes island-wide cratered in April, dropping 54 per cent year over year.
Last month, 189 single-family homes sold on the Multiple Listing Service System, compared to 333 in March and 412 in April 2019.
Apartment and townhouse sales decreased by 82 and 69 per cent, respectively.
Meanwhile, prices managed to hold fairly steady and in some regions even inched higher, despite the pandemic.
The benchmark price of a single-family home board-wide was $523,700 in April, a drop of three per cent and marginally higher than in March (benchmark pricing tracks the value of a typical home in the reported area)
In the apartment category, the year-over-year benchmark price rose by five per cent, hitting $313,300, which is slightly lower than the previous month.
The benchmark price of a townhouse in April rose by two per cent year over year and was somewhat higher than in March, climbing to $421,400.
Regionally, the benchmark price of a single-family home in the Campbell River area last month was $438,500, an increase of four per cent over last year.
In the Comox Valley, the benchmark price reached $521,300, up by two per cent from one year ago. Duncan reported a benchmark price of $482,800, slightly higher than in April 2019.
In its most recent Market Intelligence Report, the British Columbia Real Estate Association predicts that the 2020 coronavirus-driven recession will be profound, although the duration may be shorter than past downturns.
Home sales throughout B.C. are posting sharp declines as households and the real-estate sector adhere to social distancing.
As measures implemented to mitigate the spread of COVID-19 are gradually lifted, the BCREA expects that low interest rates and pent-up demand will translate to a “significant recovery in home sales and prices.”
While the provincial government has designated real estate as an essential service, it is not business as usual.
The VIREB says it’s embracing technology solutions, such as virtual open houses, to continue assisting their clients.
“Being declared an essential service recognizes that many British Columbians are currently involved in real estate transactions that began before the pandemic was declared, or may need to be involved in one in the coming weeks and months,” board president Kevin Reid said.
Reid said that realtors’ first priority is public health adding that sales “can continue as long as everyone involved is protected.”
This Week’s Top Stories: Canadian Real Estate Prices Expected To Fall, and Banks Set Aside Billions For Losses – Better Dwelling
Time for your cheat sheet on this week’s most important stories.
Canadian Real Estate
CMHC’s Canadian Real Estate Price Forecast Shows Big Drops In Ontario And BCCanada’s national housing agency gave a detailed breakdown of its real estate price forecast. Prices are expected to fall later this year, and continue into 2021. The forecast ends 2022 not quite recovered across the country. Different markets are expected to be impacted differently, with Ontario and BC projected to take big hits. Less overvalued markets like Quebec are expected to see much smaller price declines.
Canada’s Big Six Banks Set Aside Over $10 Billion For Bad Loans, Up Over 300%
Canada’s Big Six banks are expecting billions of loans to go bad soon. Provisions for credit losses (PCLs) hit $10.92 billion at the Big Six, up 346.42% from the year before. PCLs are cash set aside for loans the bank believes have become unrecoverable. The sudden spike of increase implies banks see delinquencies to rise sharply soon.
TransUnion Warns A “Severe” Scenario Likely In Canada, Mortgage Defaults To Jump
TransUnion, one of North America’s “Big Three” credit rating agencies, expects the mortgage market to deteriorate. Analysts from the firm look at over 40 metrics, including forbearance and credit. At this point of the pandemic, the firm sees a “severe” scenario playing out, with mortgage originations dropping, balances swelling, and delinquencies doubling. That’s the trifecta of bad news when it comes to mortgages.
CIBC: Challenges To Canadian Real Estate Will Be “Coming In 12-18 Months”
One of Canada’s biggest banks sees the real estate market getting hit, but doesn’t expect issues for 12 to 18 months. The bank notes unemployment from 5.5% pre-crisis, to 13% currently. They expect unemployment to fall back to 8% next year, but that’s still at recessionary levels. This should lead to reduced real estate activity, with anticipated declines of 5 to 10 percent. The bank’s analysts further added, “high cost units in the high-rise segment of the market seeing the most notable price declines.”
Most Of Canada’s Insured Mortgages On Deferrals Projected To Be Underwater Soon
Using the CMHC’s forecast, most of Canada’s recently insured mortgages are projected to be underwater. The CMHC estimates 12% of insured mortgages are now on payment deferral, and they expect this to rise to 20% by the end of the summer. The CMHC is forecasting price declines between 9 and 18% over the next 12 months. This would leave a considerable portion of insured mortgages with less than 1% equity in the next few months.
Toronto Real Estate
Only 5% Of Greater Toronto’s New Homes Sold Last Month
The pandemic finally put the breaks on Toronto’s new home sales, which seemed previously untouched. There were just 771 units in April, down 80% from last year. This is a whopping 78% below the 10 year average. While the slowdown is expected, the decline in sales is much faster than the decline in inventory. This will lead to downward pressure on prices if it persists.
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Birds that come by looking for real-estate (8 photos) – BradfordToday
As I mentioned a couple of weeks ago in a story here, I am fortunate to live on a farm property a little north of Alliston, where there is a mix of open land, a stand of mature conifers, smaller trees and bushes. It is a wonderful bird habitat.
In the past couple of months some of those birds have been searching for suitable living quarters. I was fortunate to be able to purchase an Eastern Bluebird Nesting Box from friends of mine who made boxes and donated the proceeds from sales to a local food bank.
I was pleased to have this personal connection to the builders of the potential home, and pleased at the prospect of having a nesting pair of these birds of happiness as neighbours. I have had them in the ‘hood other years and thus was hopeful they may chose to move into a home built with them in mind.
I was very excited one day in April when I spied a pair in nearby trees. And, as you may well imagine, even more so when I saw them checking out the house. The male sat on it and went in, no virtual tour was available online. He seemed to like what he saw and called his mate to check it out. They came back a couple of days in a row. To me, it seemed like an easy sale. Alas, I was mistaken.
The bluebirds moved out of the picture and a pair of Tree Swallows followed pretty much the same procedure. By this time, I was hoping to double my chances with a second nesting box. The Tree Swallow couple went from box to box for about a week. It seemed to me they were testing out flight patterns from the two locations. They were very tolerant of my presence and stayed in place even when I was near. I thought – hey, they like me.
They are splendid aerialist and fun to watch. They also eat such things as mosquitoes on the fly – an impressive and appreciated skill.
After the week, however, they moved down the fence-line to a more established neighbourhood and took up residence there. There is more open field thus more comfortable room for free flying.
I was feeling a little dejected. As is the norm in my way of thinking, it was all because I did something wrong.
After wallowing in self-pity for a couple of days, I was amazed to see a male bluebird back at the box. I was cautious of being hopeful. When he was back the next day with his mate and they checked out both boxes, the stirring of excitement was hard to suppress.
I can now announce with great satisfaction and happiness, the pair chose one of these homes, moved furniture in, and have been very joyful neighbours for nearly two weeks.
It’s so great to look out my office window to see the male sitting on the nearby fence, or in the tree. He is more visible than the more muted coloured female. He is also very protective of the nest.
They are such charming little neighbours. I am delighted by their presence, and it is a privilege to have them so close.
As the weeks go by, I will share some of my experiences of bird visitors with readers. In the meantime, keep your eye to the sky and look for birds that may come by.
A note: Ed and Bryan Osborne sold 120 nesting boxes, and raised $4110.00 for the Tottenham Foodbank. They have another 20 or so to sell.
Rosaleen Egan is a freelance journalist, a storyteller, and a playwright. She blogs on her website rosiewrites.com
The Current State of Vancouver Real Estate
The pandemic of the coronavirus has shifted the world and its economy. Businesses are closed and homes are being affected by this crisis everyday. The same can be said in one of Canada’s largest cities, Vancouver– and more specifically, Vancouver’s real estate.
How Vancouver is Affected
The coronavirus has significantly slowed real estate sales in Vancouver. What was once a hustling and bustling city, is now a quiet solitude with unattended houses. The housing market has seen nearly a 40% decrease as compared to Vancouver real estate in April 2019. Regardless, housing prices have not faltered. In fact, that average price of a Vancouver home has actually gone up by 2.5% since the pandemic. Any major change in the prices of these homes could really affect homeowners, as Vancounver has always been known for having overpriced housing. Homeowners expect the prices of their homes to rise. Those who were hoping to get a discounted home in Vancouver will be disappointed– prices seem to be on the rise all across Canada.
The Average Cost of Vancouver Housing
The pandemic can stand to deter the average cost of houses in Vancouver. While the average cost of a home in Canada sits at $400,000 Canadian dollars, the average home in Vancouver is about 1.3 million– even condos average around $800,000. As it stands, Vancouver is one of the most expensive places to live in North America, coming only second to San Francisco. The median income in Vancouvers is around $70,000. Vancouver’s citizens are struggling to pay their high mortgages during this troubling time. Because so few can work and housing/renting costs are so high, people are not able to make payments on time.
What Vancouver is Doing
Luckily, Vancouver is not leaving its citizens to fend for themselves. They are offering potential benefits and rental reliefs of up to $500 CAD/month. Some landlords will also see a mortgage relief, too. The government has also been working with banks to possibly defer mortgage payments.
The Major Concern
The major concern within Vancouver real estate is that if the coronavirus lasts longer than three months, prices will start to drop. Vancouver is able to maintain its strong prices and low interest rates for now, but if they continue to lose revenue due to a lack of tourists and immigrants, they will have to make up for it elsewhere. Housing tax prices will increase for “satellite families” (families who do business outside of the country from home). The Vancouver real estate market is doing well for now, but it may not last if the pandemic doesn’t soon end.
Overall, the coronavirus has made a tremendous impact on real estate all over the world. Vancouver is particularly susceptible to the issues regarding real estate because it costs so much to live there. The prices are still on the rise in Vancouver, but that will likely not be the case if the pandemic lasts past June.
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