It was still (very) far from the usual bustling spring-time activity but Canada’s housing market kicked into gear last month. May’s rebound is the first step on a long road to recovery. The good news is buyers and sellers are becoming more comfortable participating in the market.
You can access detailed market reports by area here:
May 2020 Real Estate Market Statistic for Burnaby, New Westminster, Coquitlam, Port Coquitlam, Port Moody, Pitt Meadows, Maple Ridge: GVR 2020 May.pdf
May 2020 Real Estate Market Statistic for Downtown, Westside, Eastside, North Vancouver, West Vancouver, Richmond, Tsawwassen, Lander: MVR 2020 May.pdf
Vancouver Real Estate activity partly recovered last month, rising almost 30% from April, new listings rebounded more than 50% from April. This didn’t throw price trends off course in May—the area’s HPI continued to rise 2.9% y/y—though any further deterioration would set the stage for moderation in the period ahead. (Source: Robert Hogue, RBC Economics)
Vancouver Real Estate activity partly recovered last month, rising almost 30% from April. This was still down 44% from a year ago and 54% below the 10-year average. Supply rebounded a little more strongly than demand, however. We reckon new listings rebounded more than 50% from April. This didn’t throw price trends off course in May—the area’s HPI continued to rise 2.9% y/y—though any further deterioration would set the stage for moderation in the period ahead. (Source: Robert Hogue, RBC Economics)
MORTGAGE UPDATE: Last week CMHC announced that they are decreasing affordability by 10% to 12% for everyone who purchases a property with less than 20% down. The bright side is that both Canada Guaranty and Genworth are NOT following the changes CMHC announced effective July 1, 2020 which tighten up the mortgage rules for insured mortgages reducing buyer’s purchase price between 10% to 12%.
EMPLOYMENT: Employment in British Columbia increased by 43,000 in May and the unemployment rate rose 1.9 percentage points to 13.4%, as more people looked for work. Almost all of the employment increase in the province was in the services-producing sector (+41,000), led by accommodation and food services (+12,000), educational services (+12,000), and wholesale and retail trade (+12,000).
CONSUMER SPENDING: The Royal Bank economists survey of consumer spending in May shows continued recovery as discretionary spending is returning.
- Formerly slow spending at merchants selling apparel, gifts & jewelry picked up steam in early May; Canadians spent more at clothing stores in particular.
- In mid-May, spending at entertainment and art merchants was down 37% from a year earlier, compared with a 58% drop in late April.
BANKRUPTCY: In addition, the Office of the Superintendent of Bankruptcy Canada reported that the total number of insolvencies (bankruptcies and proposals) decreased by 38.7% in April compared to the previous month. Bankruptcies decreased by 41.5% and proposals decreased by 37.2%. The total number of insolvencies in April 2020 was 43.5% lower than the total number of insolvencies in April 2019. Consumer insolvencies decreased by 43.1%, while business insolvencies decreased by 54.8%.
Though buyers are being cautious, the drive to own a home is still alive and well. Now more than ever, you need an experienced real estate agent who can help guide you through a successful transaction. Reach out today to discuss your options.