How A COVID-19 Vaccine Can Affect The BC Real Estate Market
Finally we have a number of vaccines which are being rolling out albeit slowly, that have been developed to combat the pandemic. According the CBC, Canada has procured more than 358 million doses from 7 companies.
Impact on the economy
A safe and effective vaccine will cause the end of the difficult yet necessary lockdown policies and other safety regulations. The population will be able to go out more freely and interact without fear of getting sick. There will be more travel and more spending in areas where people have been restricted – for example restaurants, theatres, clothing, etc. But it will take a long time for the economy to fully recover and recoup the losses seen during the pandemic.
Impact on housing
- One notable trend from this pandemic has been that more people are working from home than before. The demand for detached homes has gone up significantly and many experts expect this to continue. There were already supply side issues pre-pandemic so the expectation of inventory issues will still carry on. So don’t expect house prices to come down any time soon.
- Once construction jobs are able to get back to normal, the supply should increase over a period of time, but this will not be as impactful as we have been in a historically tight market. Don’t forget, there will be a time lag before this new inventory comes to market.
- The resale market may see a small boost in supply as those people who held back from listing their properties during the pandemic may now feel more comfortable to do so.
Impact on interest rates
While the vaccine is good news for the economy, we are still a very long way from returning to pre-pandemic levels of economic activity and normalcy. In October last year, the Bank of Canada made a statement that it expected interest rates to remain low for at least another 3 years. If the vaccine roll out is successful and the pandemic is behind us, It is possible for interest rates to rise slowly as the economy returns to normal.
Impact on immigration
Prior to the pandemic, the government had increased its immigration intake to record levels. The intake of skilled workers and professionals into Canada, resulted in a steady demand for housing. Going forward, expect these levels to continue on their rising trajectory, and this will continue to impact the housing market in the form of higher demand, which puts pressure on the existing inventory, causing home prices to rise.
While 2020 has seen record-breaking housing numbers, we can expect to see even more movement as people see more stability in their employment and the economy as a whole.
If you are planning to buy a home, (and now is a good time because prices are rising) then you should contact us. We have been in the luxury real estate business for over 30 years and our real estate professionals have a wealth of experience when it comes to listing and selling your home.