April may be one of the best months of spring, but April 2020 will be remembered above all as the month of autumn.
Put simply, the month has not been good for resale real estate markets across Canada, says the Canadian Real Estate Association (CREA).
Domestic sales have fallen 57.6% since April 2019 and 56.8% since March. All major markets saw month-over-month sales decline: the Greater Toronto Area fell 66.2 percent; 64.4 percent in Montreal; The Greater Vancouver area fell 57.9 percent with the Fraser Valley down 54.8 percent; Calgary fell 53.1 percent; Edmonton fell 46.6 percent; 42 percent in Winnipeg; 59.8 percent in Hamilton-Burlington and; 51.5 percent in Ottawa.
Of greater importance to the economy, the seasonally adjusted domestic sales volume fell 62% in April from March, from $ 21 billion to just under $ 8 billion.
In Calgary, the dollar’s drop was 55.8 percent, from $ 612 million to $ 272 million.
“Never in our recent history have we dealt with the widespread effects of a pandemic that limit everyday life and have forced all of us to rotate and adapt to our new reality,” says Costa Poulopoulos, president of CREA.
Royal LePage crunchers actually calculated that April’s numbers would be worse.
“We saw what was happening in Europe and the effect of the mandatory freeze order was launched in March. We reconstructed our forecasts for the year, both the public one that we publish on prices, and the internal financial plan,” he says Phil Soper, president and CEO of Royal LePage. “We had predicted that April would drop 90 percent.”
The expectation was based on people who didn’t buy without being able to visit the homes for sale, says Soper.
“We thought 10% of a regular busy spring market made up a reasonable number of people in an emergency to buy a house,” he says. “The fact that more than 40 percent of regular buyers have gone out and made a transaction according to the home refuge guidelines means that there is a huge amount of demand in the country.”
Knowing where we have been is important, but looking for signs of where we are going is more important, says Soper, who expects April to be the nadir, according to recent visitors to the Royal LePage website.
“Typically we will have four or five million visits a month to royallepage.ca at this time of year. At the beginning of April, visitor volumes declined 30 percent year-over-year, which is a dramatic drop in the number of people learning about neighborhoods and looking at properties, “he says. “Since (the second week of May) we have increased by 22% on an annual basis, a radical change compared to the last six weeks in terms of attitudes, but this may not translate into sales.
“We report on closed activities, not on pending activities, so there will still be a delay in terms of revenue and transactions closed in May because we have been looking at the activity since late March and April. We don’t really expect the sector, from the point of view of commercial view, you start to collect materially until June. “
But still a long climb from there.
“I think we will see continuous improvements throughout the year in terms of volume, but we will not be able to recover. This year will drop as the lowest volume year in terms of number of transactions in modern times,” he says. Soper. “It’s too many weeks in the main shopping season to catch up. Most of the transactions that would have happened, I think, will happen, but they will be delayed and some of them will actually be introduced in 2021.”
Alberta has challenges beyond COVID-19, says Soper.
“When I look at Calgary and Edmonton, the (rates of decline) seem better than most parts of the country, but we must remember that the federal mortgage stress test has affected Alberta to a greater extent than other parts of the country because housing recovery it was more fragile, “he says. “So we are comparing the April numbers with a rather weak April 2019 and therefore you need to have some history behind it to see these numbers and make sense of them.
“An occasional observer might say,” I guess the oil trade war between Saudi Arabia and Russia hasn’t had any impact on the property market in Alberta after all, “and they would be wrong. It’s just a question of what the baseline is like. denominator.
“I still believe there is a balance that has been found in Calgary and Edmonton and in the Alberta market in general. It is not the healthy place it has been for so many years, but the market has moved on. Look back in February and the volumes they rose 11% year-on-year in Calgary. It was the right trend, demonstrating that the market had absorbed the excess of condominium shares; that the new normal had settled. Then you dive further into the value of oil and of the pandemic that affects simultaneously and you think that “it is going from bad to worse”.
“We have seen some improvements, marginal, but still, some improvements and I still believe there is a balance that can be found in the residential market. The commercial market, in particular the center, will probably remain very supercharged probably for the next two years.”