COVID-19 brings Vancouver real estate market to a standstill

Griff MacDonald / May 12th, 2020

Boarded-up businesses have become a common sight across Metro Vancouver

(Griff MacDonald/BCIT News)

The COVID-19 pandemic has effectively shut down all aspects of everyday life, across Metro Vancouver and Canada, since the beginning of March. Realtors were named among the province’s list of essential services during the pandemic. Among the industries that have felt the impact of this pandemic is the Metro Vancouver real estate market.

The industry has seen a substantial downturn in business on both the commercial and residential sides. Rod MacKay Jr., a Vancouver-based commercial real estate agent for William Wright Commercial, estimates that his business has declined by more than 75% in recent weeks. With the vast majority of society abiding by social distancing measures, all aspects of MacKay Jr.’s business have slowed down.

“With deals that I’ve got on the go right now, things are just taking a little longer…it’s a bit more of a snail’s pace and as far as new business goes, far less inquiries, especially if you’re looking at the retail side of things.” – Rod MacKay Jr., Commercial Realtor

One of MacKay Jr.’s listings, pictured here, has drawn zero interest since the pandemic began.

(Griff MacDonald / BCIT News)

According to MacKay Jr., the social distancing measures implemented in British Columbia have played a significant role in commercial real estate activity slowing to a halt. He says that the measures have resulted in the cancellation of property viewings, and that has led to reluctance from anyone to engage in new business. MacKay Jr. says that in an industry so reliant on in-person relations, it is difficult for anyone to conduct business as they normally would, and many of his business dealings have been put on hold. The vast majority of his client inquires in recent weeks are focused on questions to do with rent relief during the pandemic.

Whether you’re an RMT (Registered Massage Therapist) and you can’t see people or you’re running a retail location where you’re non essential, you need to shut down, or your business has just been greatly reduced cause you can only do takeout if you’re a restaurant, people aren’t going to be able to make rent and it’s tough and you have to explain to landlords that these tenants aren’t making the requirements or they’re not making enough money to pay rent so you’ve got to get them relief and it’s really tough.” – Rod MacKay Jr., Commercial Realtor

You can listen to Rod MacKay Jr. here:

The widespread effects of COVID-19 have also been felt in the residential real estate market. According to the Real Estate Board of Greater Vancouver’s (REBGV) March 2020 report, home sales in the region were 19.9 percent below the 10-year March sales average. This drop in home sales was largely due to the impacts felt in the latter half of March. The first ten business days of March saw a daily average of 138 residential home sales, while in the final ten business days of the month, that daily average fell to 93 sales. The effects of COVID-19 hit harder in the month of April, with the REBGV report showing that residential home sales in the region totalled 1,109 for April 2020.  This April 2020 total decreased by around 800 compared to April 2019, and by more than 1,300 compared to March of this year.

 

Rod Mackay Sr. has over 35 years of experience as a realtor in the Vancouver area.

(Rod MacKay)

Rod MacKay Sr. is a long-time residential real estate agent in the Vancouver area; he says that the COVID-19 pandemic has had a dramatic effect on the industry.

“I would say most buyers are very reluctant because they don’t know if they’re at the bottom, they don’t know if this is temporary, nobody knows how long this is going to go on.” – Rod MacKay Sr., Residential Realtor

You can listen to Rod MacKay Sr. here:

According to MacKay Sr., social distancing measures have disrupted the way business is typically conducted in residential real estate. MacKay Sr. says that his brokerage firm – Maude, MacKay, & Co. Ltd. – as well as many others have had to implement new COVID-19 policies to ensure that any buyers or sellers have been abiding by the provincial government’s suggested safety protocols.

Despite the downturn in business in recent weeks, MacKay Sr. doesn’t see this pandemic causing the kind of economic damage that resulted from the Financial Crisis of 2008. He believes this is much more of a temporary industry disruption.

“I don’t think this is going to be sustained for a long time, I think once the pandemic is under control I think we’re going to see a bounce back and the reason I think that is because we obviously had pent up demand heading into this and I think once we come out of it and people feel healthy and safe and well again that they’re going to start buying and selling again.” – Rod MacKay Sr., Residential Realtor

Non-essential businesses across the region have been forced to board up their doors. Many of them are seeking rent relief to try and survive through the pandemic.

In the past week, the provincial government announced that British Columbia will begin to open up in phases. MacKay Sr. believes that because of this, the residential real estate market in Metro Vancouver is not likely to suffer long-term effects. While MacKay Sr. sees BC as a place that is and will continue to be a desirable place to live, he believes it may take a while before people start coming in from other countries or even extra-provincially, most of the demand is going to be domestic.

MacKay Sr. notes that a silver lining around all of this is that buyers and sellers will have time to reflect and assess as opposed to making panicked decisions. Still, MacKay Sr. feels that the uncertainty of the future leaves many doubts about what the real estate market in Metro Vancouver will look like moving forward.