The rennie review is produced each month by rennie intelligence, which includes the latest real estate data for Vancouver and the Lower Mainland's housing market.

Measuring the effects of a global shutdown

There is a well-known saying that the best laid plans often go awry; that, of course, we never really do expect the unexpected.

Indeed, here we are in April 2020 in the midst of a self-imposed economic lockdown, one month after a global pandemic was declared. Few people (if any) predicted the scale and scope of what we are now experiencing. And as we settle into new routines and realities (temporarily, at least), it is instructive to consider what the data are telling us about the state of our economy and our resale market. 

Interestingly (and somewhat frustratingly to market analysts), the latest data on our local resale market and on our economy have not fully captured the effects of our coordinated economic shutdown.

In looking at resale trends in Metro Vancouver, sales processed in the second half of March 2020 were only down 8% versus the first half of the month (in 2019 they increased by 3% between the first and second halves of March). Not as bad as one might have expected, but we expect April’s resales to be far below those of March. More reflective of our current predicament than sales counts, perhaps, is that the number of withdrawn listings rose by 29% between the first and second halves of March (compared to virtually no change in March 2019)--a harbinger of things to come. 

Moving on to the latest jobs data, which were released just last week, we see a Canadian unemployment rate that has jumped from 5.6% in February to 7.8% in March. This is a sizeable expansion to be sure, but it is based on the number of unemployed people across the country growing by 1.01 million--far less than the estimated 4 million people who applied for EI benefits in the past few weeks. (Why the discrepancy? Because the latest jobs data, from Statistics Canada’s Labour Force Survey, were collected between March 15-21 and therefore only captured the initial impacts of the downturn.) Here in Metro Vancouver, the region’s unemployment rate rose from 4.4% to 7.5% between February and March as the official tally of unemployment rose by 117,300. Numbers aside, we know that virtually every business in Canada has been affected one way or another by our response to COVID-19, and mostly in a negative way.

So the situation is, for now, challenging. Unlike at the outset of past severe downturns like the Great Depression of the early-1930s and the Great Recession of 2008/9, however, we know that this mandated economic shutdown has an end to it. Canada’s unprecedented federal economic stabilization package, the myriad provincial stimulus plans, and the Bank of Canada’s aggressive monetary policy--including the heretofore unicorn of the Bank’s arsenal, Quantitative Easing--are all aimed at bridging us from where we are to where we need to be. 

We are in the midst of a 12-round, heavyweight boxing match that we are going to win, but that will leave us groggy and needing time to recover. What will that recovery look like? Will it be v-shaped? U-shaped? Arabic Baa-shaped? A square root sign? We don’t know. But at rennie, and in each month’s rennie review just as we’ve always done, we will continue to collect and analyze the latest data that will help us navigate the path that lies ahead. That much, you can expect.  

Our rennie intelligence team comprises our in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.