VANCOUVER — A report from the B.C. Real Estate Association says the 2020 COVID-driven recession will be deep, although it could be shorter than other Canadian economic downturns.
The market intelligence report released Monday by the association says it expects home sales to sink 30 to 40 per cent for April 2020 and remain depressed into the summer as households and the real estate sector adhere to social distancing rules.
But as those health measures are gradually lifted, the report says low interest rates and pent-up demand will translate to a significant recovery in home sales and prices.
The report says its current forecasts is for the Canadian economy to shrink by about four per cent in the first quarter of this year, "followed by a startling 21 per cent decline" in the second quarter on a seasonally adjusted annualized basis.
It says the total Canadian output will likely be around seven per cent before the economy starts to grow again.
The report says history shows that the housing market bounces back after recessions, and given historically low interests rates and pent-up demand, housing sales and prices are expected to recover in 2021.
It says because the COVID-19 recession is unprecedented and not man-made, the economy may be more likely to snap back to near where it was before the pandemic.
"However, the longer the duration, the more likely that jobs do not return, businesses fail, and the recovery is much slower," it says.
This report by The Canadian Press was first published April 20, 2020.
The Canadian Press