Home prices could remain stable: Royal LePage
April 21, 2020
The price of homes in Canada is expected to remain remarkably stable through the COVID-19 pandemic, according to a forecast by Royal LePage.
If the strict restrictions in the fight against COVID-19 are eased during the second quarter, prices are expected to end 2020 relatively flat, with the aggregate value of a Canadian home being $653,800—up a modest 1 per cent year-over-year.
If the current tight restrictions on personal movement are sustained through the summer, the negative economic impact is expected to drive home prices down by 3 per cent ($627,900) year-over-year. In December 2019, Royal LePage forecast the national aggregate price to increase 3.2 per cent by the end of 2020.
Due to COVID-19, expected price growth has been revised down almost 70 per cent compared to Royal LePage’s base scenario.
“The impact of COVID-19 on the Canadian economy has been swift and violent, with layoffs driving high levels of unemployment across the country,” said Phil Soper, president and CEO, Royal LePage. “From our experience with past recessions and real estate downturns, we are not expecting significant year-over-year price changes in 2020. Currently, the inventory of homes for sale in this country is very low, matching low sales volumes as people respect government mandates to stay at home.”
Broad-based measurements of industry activity point to a sharp decline in the four or five weeks since all provinces declared states of emergency, the agency noted.
Home search activity on popular real estate websites is down more than 20 per cent. Home showings are down by more than two-thirds, according to Royal LePage. Open house gatherings at a property for sale have been reduced to almost zero nationwide.