The arrival of COVID-19 caused stock markets and oil prices to fall and unemployment rates to rise.
In response, the Bank of Canada significantly lowered the prime interest rate and our provincial and federal governments launched a series of relief programs to help those impacted.
Locally, COVID-19 caused home sale and listing activity in Metro Vancouver to initially slow to about one-third of the pace witnessed prior to the pandemic. REALTORS® were quick to adapt, converting most services, like open houses, to a virtual environment. While housing market activity is beginning to pick up, some commentators have suggested that COVID-19 could cause home prices to decline longer term.
To help us make sense of these developments, we asked the British Columbia Real Estate Association's Chief Economist Brendon Ogmundson a few questions. Here are his answers.
1. What long-term impact will COVID-19 have on our economy and housing market?
For the first time in over a decade, the BC economy is in a recession. But this recession is unprecedented in that it didn’t happen due to collective poor business decisions, rapidly rising interest rates, bad loans, or misadventures in financial engineering. Rather, the economy has been purposely halted for the greater good. The implication being that, the shorter the duration of this unusual period, the more likely it is that demand can more readily return to where it was pre-COVID-19 and the outsized employment losses experienced this year can be reversed....
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