As governments and individuals around the world work to combat the spread of the COVID-19 virus, it has become clear the epidemic will have far-reaching impacts for Calgary’s residents, businesses and economy.
“This is beyond just the real estate industry – this is all industries that are impacted because this is an unprecedented economic event,” said CREB® chief economist Ann-Marie Lurie. “The biggest thing right now is everything is uncertain.”
In the short-term, Lurie expects many potential buyers and sellers to delay their decisions and stay out of the market.
“In terms of the housing market, over the short-term, we’ll probably see that demand will fall. But at the same time, it’s also going to impact supply. It’s going to affect both sides,” said Lurie. “If anything, that will help prevent steeper price declines.”
The result of these delays could be a busier market later in the year, if COVID-19 control measures are successful and some semblance of normal activity resumes.
“It depends on how this is contained and how early it is contained. The extent of the impact will depend on how long this lasts.” – Ann-Marie Lurie, CREB® chief economist
“You might have a busier summer or fall season than you would typically see,” said Lurie. “If anyone was planning to take advantage of the now lower interest rates, you might not see that until after this thing settles.”
Meanwhile, due to the widespread uncertainty surrounding the virus and the many potential scenarios that could unfold, the long-term picture for the housing market is much cloudier.
“It depends on how this is contained and how early it is contained,” said Lurie. “The extent of the impact will depend on how long this lasts.
“If people are stuck at home, are they really going to want to show their homes? Probably not.”
While a short period of business closures and social distancing could allow the real estate industry to bounce back relatively quickly, a longer shutdown would likely result in a host of new challenges for the housing market.
“With this wage disruption people might have, it will be interesting to see if they’ll actually even be able to take advantage of the market moving forward,” said Lurie. “We don’t know how much people’s incomes will be affected.
“With the stock markets doing what they’re doing, anyone who was potentially hoping to use some of that money to invest into a home, if we think about the equity they might have built to do that investment, some of that might also have been eroded.”