I hope you are staying safe and staying healthy.
I thought this would be a good time to give you an update about COVID-19, the economy, and the real estate and mortgage markets. For the most part, Canada has managed the pandemic well, getting an early start on implementing safety measures such as physical distancing. We have started to “flatten the curve” country-wide, and some provinces are getting ready to start easing restrictions.
At this point, the prime minister has been talking strategy with the premiers, and have decided on a set of “shared principles” for opening the economy. While we don’t know the details yet (as of this writing), we do know that it will be phased in over the upcoming months. The provinces have provided a framework without actual dates, with the intention to move forward as the science allows. The phases are expected to last weeks or even months to make sure the virus is kept at bay.
As you’ve probably guessed, COVID-19 has hit our economy hard. The International Monetary Fund (IMF) predicts our economy will shrink by 6.2% in 2020, and then rebound to 4.2% growth in 2021, as long as we contain the virus, but there may be a rebound in the not too distant future. Many of our economists say there could be a very modest recovery in the latter half of this year, with a strong rebound in 2021. Financial support for businesses and individuals, rolled out by all levels of government, has eased some of the stress and Canadians remain hopeful. You may have also guessed that the real estate market was impacted by the lockdown. Sales dropped precipitously. Now, we are seeing small signs of life. Realtors continue showing properties to clients, and completing all necessary documents using virtual technologies, which proves there is still a demand. As with everything else, the mortgage industry has adapted. Lenders offered mortgage holders up to six month’s payment deferrals. Lenders also implemented work-at-home protocols to make sure that files already in the queue were closed on time. Documentation has now largely gone online with most lenders accepting e-signatures. And we continue to see refinances and switch/transfers as lenders accept ‘modified’ appraisals. The housing market is a vital component to the success of the Canadian economy. As we can see by the recent data, not everyone is out of work and people are still buying and selling houses. If you’d like more information, please contact us. We're here to help!