New sale figures from the Victoria Real Estate (VREB) numbers show COVID-19 caused a massive drop in April sales.
Total sales in VREB’s area dropped 58.8 per cent in April compared to the same month in 2019. Compared to March 2020, they dropped 52.8 per cent. The sales of condominiums dropped 64 per cent, while sales of single family homes dropped 55.8 per cent.
Sandi-Jo Ayers, VREB’s president, said the COVID-19 pandemic continues to impact the local market. “Sales numbers are much lower than what we expected to see this spring and new listings are slow to come to market as owners wait to see what our community’s trajectory is over the course of this pandemic,” she said. “As a result, the available inventory of properties for sale remains lower than in April last year. Like so many other industries, much of the real estate market is watching, waiting and adapting.”
The spring season is the busiest part of the year for real estate agents and the pandemic has essentially choked off what was shaping up to be a strong spring market. While experts have tried to stress the extraordinary nature of the market in 2016 and 2017, 2020 had the potential to reverse the trajectory of the market. But as Ayers had told Black Press last month, “the world changed.”
The world also changed in the area covered by the Vancouver Island Real Estate Board (VIREB), where sales of single-family homes dropping by 54 per cent year over year in April. Apartment and townhouse sales decreased by 82 and 69 per cent, respectively.
Writing on househuntvictoria.ca, local real estate expert and tracker Leo Spalteholz described April as the month where “every economic indicator [has dropped] off the cliff” with real estate being no exception because April was “peak lockdown” for Canada.
“During the lockdown, no one was keen to have people coming through their house, and most of those who could hold off from selling did so,” he said.
If April was about “was all about fear and uncertainty” in the words of Spalteholz, he expects sales to pick up again in the summer, with the proviso that figures will likely continue to show “very large” year over year sales declines for many months.
Ultimately, Spalteholz urges the public to look beyond immediate numbers. “As I’ve said before, the bigger impact of this situation is not the market activity collapse during the acute lockdown period, it’s the longer term impacts on unemployment which will depress demand,” he said. “We won’t know how that unfolds until late summer when the temporary economic supports start to expire.”
If Spalteholz appears to err on the side of caution, the British Columbia Real Estate Association (BCREA) offers a more optimistic prediction. While the BCREA says a recession in Canada and B.C. is at this point “unavoidable,” history shows the housing market bouncing back with vigor following recessions.
“As measures implemented to mitigate the spread of COVID-19 are gradually lifted, we expect that low interest rates and pent-up demand will translate to a significant recovery in home sales and prices,” said Brendon Ogmundson last month in a blog post.
VREB serves Greater Victoria from Sooke to Sidney, up-Island as far as Cherry Point Road in Cobble Hill, and the Gulf Islands. VIREB serves the area top of the Malahat to the northern tip of Vancouver Island.
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