As Canada’s war against COVID rages on, life post-pandemic remains very uncertain.
But when that day does come, some businesses will be left scrambling to get things back to any kind of normalcy, while others will slide back into their old routines with ease — and this could very well include the real estate industry.
In fact, Peter Norman, Vice President and Chief Economist at Altus Group, says we shouldn’t “underestimate how fast things come back,” in terms of the housing sector post-COVID-19.
In an interview with Financial Post’s Larysa Harapyn, Norman says the second and third quarters of 2020 are going to be “disaster zones” for the housing market. But as safety measures begin to lift in the months to come and consumers return to spending and investing as they usually would, Norman says he expects to see sectors to start come back very quickly – including housing.
In terms of housing prices, Norman says he expects to see numbers “all over the map” with some negative and some positive numbers in the next few months. This is in line with what some big banks are hinting at, with CIBC forecasting Canadian home prices to fall 5-10% relative to levels in 2019, while TD is forecasting home prices, specifically in Toronto, could increase by 7.8% in 2020.
So to suggest there’s a range of volatility might be an understatement.
By the end of the year (when Norman expects things to return to normal) when momentum returns to the market, and the demand from the downtime and the supply are back on track, Norman says he expects there will be a lot of activity in terms of both the resale market and new construction.
The Altus Group VP also sees open houses and showings at a standstill across the country and a lack of supply – due to no one listing their homes and builders not coming forward with new projects – as impediments on housing sale transactions.
But as we “normalize” and containment measures come off, Norman says he expects the “physical restrictions” in the housing market to ease and realtors will start to have open houses and sales centres for new projects will reopen.
As for what’s going to help drive real estate recovery, he believes it’s “technology, technology, technology.”
Norman says he’s already seen both of those channels turn to technology in a “very big way” with realtors using virtual open houses and a variety of other tools in order to communicate with clients and home builders using virtual sales centres and using e-signing and newly allowed “techniques” to get transactions done.
Looking ahead, Norman says as we head into the fall and transition well into Q4, he expects to see a combination of these “workaround techniques” in addition to in-person measures happening again, which will further boost transactions.
You can watch the full interview below.