During these unprecedented times, we will continue to update our followers throughout Metro Vancouver on current real estate market conditions. We will also post any government and/or regulatory policies that might affect our industry as the COVID pandemic evolves.
Stress Test: The stress test changes scheduled for April 6, 2020 has indefinitely been suspended. The current benchmark rate for qualifying insured mortgages, less than 20% down payment, were scheduled to be replaced by a new rate calculated on a weekly median five-year fixed rate plus 2%. For more information, please refer to the new release by the Office of the Superintendent of Financial Institutions.
Conveyancing: In-person meetings at law firms are still required for completion in order to have certain documents witnessed and the require the officer to take a copy of the client’s ID. Otherwise, precautionary measures are in place to prevent transmission but law firms are operating their business regularly.
Contracts: Contracts of Purchase and Sale are still enforceable despite the pandemic. The contracts are not voidable because the Force Majeure clause and Act of God clause do not apply to pandemics unless it was specifically stated in the contract. For more information, please refer to the article by Western Investor.
Predicted Market Analysis: The British Columbia Real Estate Association (BCREA) forecasted the potential impact of COVID-19 by analyzing the how GDP growth or decline, the qualifying rate, posted mortgage rate, and stress test changes correlates with MLS Sales and MLS Average Prices for 2020.In all scenarios, it is predicted that there will be a steep decline of home sales in the second quarter and a steady decline in prices in the same quarter. We see the average price of homes increase in the third quarter as the number of home sales increase due to economic recovery. For more information, please refer to the article by the British Columbia Real Estate Association.
Construction Sites: An order under the Public Health Act that prohibits the gathering of 50 or more people does not apply to the construction industry. The construction industry has been encouraged to continue operating while following prevention protocols. For more information, please refer to the new release by the Government of British Columbia.