A report from Re/Max says in the same way Canada learned containment lessons from other countries where the virus hit earlier, we can also look to these economies to assess the potential rebound in our own economy and real estate market. That, combined with a new study by Leger and commissioned by Re/Max, says the market here may improve quickly.
“The market has definitely seen a steep decline in the volume of transactions in the last few months, but in much of Canada, transactions have been happening and prices in particular have been resilient,” says Christopher Alexander, EVP and regional director, Re/Max of Ontario-Atlantic Canada. “Now that economies are beginning to re-open across the country and in light of some of the recent activity we’ve seen in various cities across Canada, as well as in certain European and U.S. markets, we anticipate that demand could begin to improve much faster than we initially anticipated at the beginning of COVID-19.”
Alexander says Toronto, Ottawa and Vancouver are “already experiencing an uptick in activity and a number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that is not nearly as dire as some suggested.”
The Leger survey says 56 per cent of Canadians who are planning to engage in the real estate market expect to do so in less than a year. Almost half of those surveyed believe that the real estate market will bounce back to the strength it was before COVID-19 by 2021, while 29 per cent said that before the end of 2020, the real estate market in Canada will return to its pre-pandemic strength.
As lockdown restrictions begin to ease in countries such as Austria, Re/Max brokers and agents in the region say that recent demand was higher than before COVID-19 took hold, even in comparison to the same period in 2019. Re/Max Europe attributes this to accumulated demand that fell dormant during quarantine but has since returned in a manner greater than has been experienced in other countries.
In Norway, which is comparable to North America in terms of real estate technology and transparency, the market experienced its lowest level of transactions during the week of March 16, when sales declined 36 per cent year-over-year. By May 2020, sales were trending upward again, reaching levels just 7.5 per cent below May 2019 activity.
Norway experienced an initial 10-per-cent drop in listings, which trended upward to 50 per cent during the lockdown. However, by May 2020, listings returned to the market and were 18 per cent below May 2019 levels.
Re/Max Europe says Norway is showing signs of stability as restrictions continue to ease and consumer confidence returns. It is estimated the market could bounce back to sustainable levels by the end of 2020.
In Italy and Spain, which were among the hardest-hit regions in Europe, real estate markets are just now beginning to reopen. Current levels of uncertainty combined with the quickly-changing environment diminishes the reliability of any forecasting in the short term, the company says.
“It’s still too early to tell when the housing market across Europe will recover to pre-COVID-19 levels, particularly given the asymmetry of countries and cities concerning their economies, regulatory processes and pandemic containment efforts,” says Kurt Lukas, EVP, Re/Max Europe. “What we do know is that COVID-19 has shifted the practice and focus of our industry as a whole, whether that’s through the increased use of technology such as virtual tours, e-signatures or video conferencing by consumers and real estate agents; a potential shift in buyer trends, such as different types of properties; or economic resilience.”
Re/Max of Ontario-Atlantic Canada and Re/Max Western Canada estimate that the housing market is likely to gradually begin its return to sustainable, healthy levels toward the end of 2020.
“Canada’s housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic that housing market could be restored much sooner than initially expected,” says Elton Ash, regional EVP, Re/Max of Western Canada.