Third COVID-19 wave threatens to limit housing supply
Photo: James Bombales
Sales and prices continued to surge across the country in March, but the worsening third wave of the COVID-19 pandemic threatens to knock the market off course by keeping sellers from listing their homes.
While the latest sales data released today by the Canadian Real Estate Association (CREA) showed homebuyers snapped up another record-breaking number of properties last month, an economist with the organization expressed concern around the surging infection numbers’ potential impact on home sellers in the weeks and months ahead.
In a media release accompanying the March data, Senior Economist Shaun Cathcart noted there was a welcome surge of supply that hit the market, a trend that will hopefully continue and eventually help take some of the steam out of rapidly rising home prices.
Cathcart tied the surge back to “pent-up supply,” which some market experts had expected to manifest in the form of more homes being listed for sale as the threat of COVID-19 receded.
“[A]s the uncertainty caused and danger posed by COVID wind down, some owners who would not sell during a global pandemic will emerge with properties for sale,” Cathcart said in the release.
But even as the country’s vaccine rollout picked up speed through March and further ramped up in early April, new infections — which spent much of January and February declining — began rapidly rising once again.
The impact on home seller psychology remains to be seen and the third wave may subside faster in the face of a successful vaccine rollout. Still, Cathcart worries that the third wave “could throw a wrench into the works of a potential supply recovery this spring.”
According to the economist, if the experience of 2020 is any indication, many Canadians who already own a home may be inclined to “hunker down” and not give it up.
If housing supply continues to be limited over the coming months, expect home prices to continue breaking records. In March, the national average home price rose 31.6 percent annually to an all-time high of $716,828.