All major housing markets in Canada are in the slump phase of the real estate cycle, except one city — Ottawa — according to the Real Estate Investment Network’s (REIN) COVID-19 Special Edition: Real Estate Cycle Update report.
The findings are based on many REIN research methodologies, including REIN’s Long-Term Real Estate Success Formula and REIN’s Real Estate Cycle Scorecard, both of which look at rapidly-evolving changes of economic fundamentals affecting the real estate market, such as GDP, jobs and population.
“Ottawa emerges as an outlier in the current pandemic landscape partly because as the seat of Canada’s federal government, it’s insulated to some extent from the massive pandemic-related joblessness impacting the country,” says Jennifer Hunt, vice-president research for REIN.
While ‘slump’ is generally characterized as a market slowdown, the report says it can present opportunities for well-positioned investors to take advantage of the good deals that are bound to hit the market sooner or later.
The real estate cycle functions as a predictive tool to determine which phase a specific market is currently in based on driving indicators and market influencers. The report shows where specific markets are in the real estate cycle, including what to do and what to avoid doing.
“We may not be able to direct these market forces, but we can control how we respond (by) employing exactly the kind of ‘pandemic pivot’ we need to protect our property during these turbulent times,” says Hunt. “The key will be in watching for indications of recovery, such as economic activity, employment, immigration and new rental demand.
“Our report suggests the impacts of COVID-19 on these driving indicators will move most markets further into the slump phase in the coming months despite provinces gradually re-opening their economies.”
To access the report, go to http://cdn3.reincanada.com/Research/COVID-19/COVID-19-Special-Edition-Real-Estate-Cycle-Update-May2020.pdf
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