According to the Real Estate Board of Greater Vancouver, home sales in the region were still strong during the first two weeks of March 2020, with the impact of COVID-19 hitting hard and quickly over the second half of the month.
But some of the coronavirus-related impacts were felt even weeks earlier, based on RE/MAX‘s account of Metro Vancouver’s housing market in a blog post last week.
The real estate brokerage says the local market did not see its typical Lunar New Year uptick due to the growing crisis that was, at the time, mostly isolated in China. The Lunar New Year period in 2020 was between late-January and early-February.
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“With the closing of national and international borders as a response to the pandemic, real estate players within the Metro Vancouver market have noticed a marked decrease in the number of Chinese travellers and buyers, particularly around Chinese New Year — a hot time for foreign buyers,” reads the post.
“The restrictions being imposed within China in response to the virus are having monumental impacts upon their economy, and many of these restrictions have already spread to other countries that are home to other heavy investors in Vancouver Real Estate.”
The coronavirus has had a broad impact on all sectors of the economy ever since it evolved into a pandemic last month, and the real estate sector is no exception.
With government officials, real estate regulatory bureaus, and real estate brokerages calling for the temporary suspension of face-to-face business, including open houses, to allow for physical distancing and self-isolation to be practiced, overall sales volumes for the latter half of March saw a noticeable drop.
Over the first 10 business days of March, total daily home sales in the region averaged 138 units. This dropped to a daily average of 93 unit sales over the last 10 business days of the month.
RE/MAX suggests that the lowered available supply in the market as a result of the coronavirus could potentially cause prices to increase, particularly in the condominium market, which is the segment of the local housing market that is most unbalanced.
“While it remains uncertain whether this downward pressure on demand will be enough to soften prices within Vancouver, many are optimistic that any impact will be temporary,” continues the post.
“Countries like China are already pulling themselves out of the deep coronavirus shutdown that we’ve only just entered as a country. If their economic recovery follows the same sharp trajectory, it is probable that foreign investor interest will be directed back towards Vancouver before the close of 2020.”
RE/MAX cited Canada Mortgage and Housing Corporation’s broad finding that 11% of the region’s condominiums are owned by non-residents.