I wanted to provide a quick update here on the housing market. I have been tracking activity on a weekly basis and working with some policy makers to keep them up to date. Obviously everyone is trying to get a handle on what the future will look like.
Right now I have monthly sales for Greater Vancouver tracking at 1100 for the month of April. That would put sales down 40% on a year-over-year basis. That doesn’t sound completely terrible, although keep in mind April 2019 sales were the lowest since the year 2000. So yea, at 1100 sales that would be the lowest in history for April.
New listings have also catapulted off a cliff, and should finish the month down about 60% on a year-over-year basis. Here’s how the supply demand picture has been shaping up.
Even though new listings are way down, months of inventory for sale is building, growing from 3.5 to 7 months of supply in the past four weeks. That puts in a buyers market, and we are seeing prices negotiated lower, albeit only by a couple percent.
There’s certainly no panic at the moment, although things will get more interesting as mortgage deferrals expire, and missed rent payments/ rising vacancies begin to put pressure on some over leveraged landlords. A recent survey from Landlord BC suggests about 65% of landlords received full rent for April. The month of May will be another test.
These are certainly difficult times, and obviously everyone wants some relief from their financial burdens. However, you simply can’t bail everyone out. The Vancouver Tenants Union is urging renters and small landlords to band together to push for a complete rent and mortgage freeze — not deferrals. Suggesting, “Does it make sense to try to get blood from a stone and harass your tenants, or does it make more sense to push pressure on your member of Parliament and the big banks and try to get real cancellation of mortgage payments?”
Meanwhile, the seniors relying on retirement income streams are pleading with the banks not to cut to their dividend payments. Clearly both are not possible, you can’t cancel mortgage payments and also expect the bank to maintain dividends. Thus, there must always be one loser. I think we are entering a bull market for social unrest.