Ryan Berlin: "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."
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.
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More reflective of our current predicament than sales counts, perhaps, is that the number of withdrawn listings rose by 29% between the first and second halves of March (compared to virtually no change in March 2019)–a harbinger of things to come.
Meanwhile, Canada’s unemployment rate jumped from 5.6% in February to 7.8% in March, based on the number of unemployed people across the country growing by 1.01 million. Here in Metro Vancouver, the region’s unemployment rate rose from 4.4% to 7.5% as the official tally of unemployment rose by 117,300.
Needless to say, the current environment is challenging; however, unlike at the outset of past severe downturns like the Great Depression of the early-1930s and the Great Recession of 2008/9, 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, we will continue to collect and analyze the latest data to help navigate the path ahead.
That much, you can expect.
Ryan Berlin is the Senior Economist with rennie intelligence.
- In February – and how long ago does that feel – Ryan Berlin noted demand continued to outpace supply as home prices rose.
- Chris Gardner: our leaders’ next task is charting a path back to economic recovery, and the new normal.
- Boris Johnson went from shrugging off COVID-19, to being rushed to intensive care, to an almost miraculously speedy recovery.