Buckle up in your bubble, as we head into the last month of 2020 and down the rabbit hole of stagnating provincial health policies. The B.C. Health Authority has again enacted the “essential only travel policy” province wide, because of our rising positive COVID-19 testing numbers. We are told that Christmas this year will be different, and that it is a sacrifice we must make for the exceptional circumstance we are living under. Other provinces are living under even more draconian measures, the most prominent example being Manitoba, where residents are now banned from purchasing non essential goods.
While it can be argued that the necessity of these policies is for the greater good of all, there exists a double standard in allowing large chain and big box stores to remain open, while smaller stores are again closing their doors. This imposed anti-small business policy has created an animosity of unfairness.
Banks, land registration services, and real estate agent services were deemed essential services in the spring, and thank goodness for that designation, as this summers “land rush” was a major factor in helping to keep our shutdown economy ebbing forward. The last five months of record property sales across Canada, encouraged spin off spending and helped to keep many other sectors from faltering.
The compelling reasons to live in small-unit, high-density areas like Metro Toronto or Greater Vancouver are gone. If you now work from home and your pastimes like the gym, large concerts, sporting events, eating out in restaurants and club night life are no longer happening being locked down in less than 800 sqare feet of space makes little to no sense.
This mass residential migration trend is prevalent around the world; billions of people have already packed their belongings and moved in 2020. Now being dubbed the “Great Relocation”, this relocation from urban to rural locations continues through the winter months, a trend showing no signs of slowing.
We must assume at some point there will be adverse longer-term effects on urban housing in general, and the market cracks have started to appear in the urban condo markets first. Analysts are already ringing the alarm bells about the Toronto condo market being flooded with inventory, reducing rents and sales prices. Existing condo owners, who were poised to sell and enter the single detached market, are now having a tough time selling in this now burgeoning buyers market. The Vancouver condo market is seeing similar slow activity with softening sales prices due to rising inventory and lower asking rents.
Real estate is historically documented and remembered by its cycles of highs and lows, and the Lower Mainland has been enjoying a boom cycle since the last correction ended in late 2015. Vancouver has been showcased worldwide as one of the best cities in the world to live in, and more recently, a hub for attracting international tech companies looking to set up offices in the metropolitan centre. The inspiring natural beauty and warmer climate, along with all the year round outdoor activities makes Greater Vancouver a very sought after place to live, work and play. When the pandemic broke and lockdowns ensued, it made more sense to live work and play somewhere cheaper with more indoor and outdoor private space.
We have been blessed to live in a region that has so much potential for employment and enjoyment. Having gone through what can only be described as an assault on Western Canadian natural resource sectors and the added economic fallout of lockdowns, 2021 will be a test of resiliency for our provincial real estate markets.
Land in B.C. has historically been a very good investment, and offers a very unique lifestyle no matter what part of the province you live in. Pessimistic predictions brought on by B.C.’s rising insolvency numbers are creating great speculation amongst investors, who watch these cycles closely to determine when the market reaches its low point to invest.
In my opinion, the single family detached market will continue its busy pace through the spring of 2021, and if your life plan included the sale of your home for retirement income then you still have a strong market and high price point to begin the process. Know where it is you plan to go, and get pre-approved to ensure you can quickly execute a purchase in your desired region. My advice is to work with a qualified, experienced realtor, who can ensure your investment is maximized and your safety is not compromised.