There are a lot of risks and opportunities in the Canadian real estate market during COVID-19. A lot of investors are feeling confused about hearing about the destruction of the Canadian economy and the lowest interest rates. However, at the same time, they are hearing about new records for real estate prices in Victoria, Vancouver and in many other cities across Canada.

Story continues below

It’s obvious that something is off with the real estate market. 1+1 no longer equals 2. Realtors need to be prepared for a large dip in the market when it comes.

Real estate sales are always highest between March and August. All the market confusion started back in March when COVID-19 first landed in Canada. People who were thinking of buying or selling property decided to hold off to see what happened.

Most people waited until July or August to start looking for a property. This means that six months of sales happened in two months. This has created a false positive that real estate is hot in B.C., among other places.

There are some dishonest real estate agents that are wanting to promote that the market is doing well. If people believe there are no property buyers right now, they will not list their houses. People should not get market information from real estate agents. And when they do deal with a Realtor, they need to make sure they are reaching out to a reputable professional with a proven track record.

If the sky were falling and zombies were walking around Vancouver, some Realtors would still say it’s a great time to get into the market!

A report from Insights West found that 53 per cent of consumers surveyed don’t see Realtors as being honest. This is why I kick Realtors off our platform all the time if I find they were dishonest or manipulative. According to the study, Realtors are seen as being less honest than journalists! Yikes!

Are real estate prices about to drop?

There are many experts who are saying the opposite of the real estate agents. Evan Siddall, CEO of Canada Mortgage and Housing Corp., who is an expert on Canada’s mortgage health, said not to trust data from Realtors.

In Mr. Siddall’s expert opinion, there will be an average housing price drop of nine to 18 per cent over the next 12 months. He believes that places like Vancouver and Toronto will be hit much harder than other cities in Canada.

This is because of Canada’s high unemployment rate due to COVID-19. If people can’t pay their mortgages, they will default. After six months of default, a judge will likely order the property to be sold to cover the mortgage. When that happens, there will be a flood of new cheap properties on the market. Too much supply and prices drop.

The last large market downturn in Canada happened back in the early 1980s. Real estate prices dropped 25 per cent year over year in Vancouver. This happened when house prices got so “high” that people stopped wanting to purchase real estate.

The interest rates were also sky-high back then. In 1981, the interest rate in Canada was 17.93 per cent. People simply could not afford a mortgage at such a high rate.

It is a similar situation now, not because of high-interest rates, but because of low employment and high real estate prices driven by foreign demand. I hope that some good comes of COVID-19, and real estate prices drop to allow locals to afford real estate.


  1. Funny you say don’t trust a realtor to let you know what’s going on in the real estate market. But whatever you are, I’m still not sure, but you have no clue on when the last downturn happened. We had a correction of 20% in 2017 in the GTA and then we had a crash nationally in the early 90’s that lasted till 95, then you can go back to 81 in your pathetic story. Sad reporting for someone who obviously knows nothing about real estate.

  2. LOL! Nice hit piece Alistair. This “writer” is not a lawyer, he’s a marketer. He’s using persuasive and controversial marketing tactics to promote his business. Many marketers like to drive a wedge between their competition and the services they offer by subtly offering opinions based as fact to skew the narrative of the story. First he builds a story about how the market is being manipulated by realtors, then talks about how his platform doesn’t allow realtors who are manipulative. (How noble of you Alistair- can we see some stats to back that up) Notice how he cherry-picks specific commentary or polls that support his argument/narrative but doesn’t offer any polls or opinions that would go against the services his company offers. When you get right down to the the gist of this article its basically saying, “Realtors are dishonest, but come use our services because we know good realtors and you won’t get screwed”. In the future REM should start putting “Advertisement” above or at the end of these articles because that’s all they really are.

  3. Market is NOT controlled by Realtors. Market is controlled by the consumer! As long as buyers line up to buy homes, it drives the prices up. What does this got do with the Realtors? Well, the Realtors are there to assist consumers to buy and sell homes. A sale won’t happen if the buyer is not willing to pay a certain price or a seller is not willing to accept what buy offers. There’s very little a Realtor can do to to bring a buyer and a seller to an agreement if they are not willing to do so (Doesn’t matter if the Realtor is honest or dishonest). At the end a successful agreement makes a sale. Every sale makes the real estate market stronger. its simple as that.
    There’s a old saying “Don’t trust lawyers”. In this case, don’t trust what they write either.

  4. It’s interesting that the author of this opinion article has taken the word of the head of CMHC as the ‘be all and end all’, without appearing to have interviewed the heads of either Canada Guaranty or Genworth – the other mortgage insurance providers here in Canada. Where are their future forecasts, and do they also agree with the head of CMHC?

    I recognize what I’m about to write is anecdotal but in talking with my clients, some of whom work for major banks, their employers are not forecasting a crash but believe we might see a period of price stability (i.e. no growth and slower market activity) as the full economic impact of the pandemic becomes more apparent. I agree we’ve seen price improvement over the last few months as the spring market was delayed due to the onset of the pandemic. If we think about the industries that were financially impacted by the pandemic (manufacturing, hospitality, service industries), the majority of people working in these industries were not in the housing ownership market anyway as they are generally lower paid (or earning non-reported income like gratuities). In general, people that are candidates for home ownership or already own a home were able to transition their work to working from home much of the time. With this in mind, I don’t think we’ll see a crash per se, but I agree that we’ll see a period of slower market activity with no price appreciation. I don’t think we’ll see a crash.

    I think many stories – particularly on REM, I’m sorry to say – are written from the point of selling headlines or personal promotion, instead of providing well-researched journalistic articles.

  5. Wow! You are certainly giving a “realtor” some pretty cool super hero powers here!
    I didn’t know I had the power to actually “create” a market just by spreading word that the market is hot right now. I guess factors like low interest rates and reduced stress test have nothing at all to do with it. It is just the power of the word of the mighty realtor whose statements must be backed up by false data of all of the sales being reported. We have the power to control the market! By God…get me a cape and a crown!
    Shady realtors and honest realtors are out there and neither have anything to do with the frenzied market right now. Simply stated: We don’t CREATE the real estate market- we INTERPRET it; and respond with advice accordingly. That is our job. In actual fact, the market is created by CONSUMER demand.

  6. Notwithstanding the implied innuendo that others in this post have picked up on about all realtors being bad, I simply don’t agree that real estate prices are going to drop because of the superficial, one-dimensional argument that unemployment is higher than usual and there’s uncertainty about the future.

    The housing crisis was around long before the pandemic came along. The mortgage qualification requirements the government put in place was intended to cool the market. What it did was knock 200,000 families out of the running to purchase a home, which you would have thought would impact prices. It didn’t then and it won’t now. There’s immense pent up demand for housing and multiple offers are still the norm for properly priced properties, whether for a primary residence or a residential investment property. Commercial properties are, and will continue to take a beating, but any residential property will continue to sell at ever-increasing prices. Sure, there will be mortgage defaults as this writer says, but that doesn’t mean that the properties will sell at a lower price. As long as there is demand that far outpaces supply, multiple offers and a determined consumer to own their own home will keep prices up. I’ve also not seen very much from any level of government to reduce property taxes, development charges, shorten approval times, fees-in-lieu of park lands, steel), the many other government -related costs, and the double digit increases in construction labour costs and materials (especially glass concrete) that all contribute to the cost of constructing a residential housing.

    Unless all of these costs drop, government policies change to encourage the private sector to build, people stop wanting to invest in real estate (arguably more secure than most any other type of investment today) and the supply starts to catch up with the overarching demand for residential housing (investment or primary ownership), prices will continue to rise despite increases in the unemployment rate.

    The writer of this article has proposed a superficial answer for an infinitely more complex economic issue and provides hyperbole in the absence of any facts to support his prognosis. He didn’t even get the 1981 interest rate right. It hit 21.03% in August 1981. I know—I did the research and wrote a book about it.

    • Hi Don:

      It’s not the organization you need to trust. That is just an entity with a nameplate consisting of numerous people you won’t be dealing with. You need to find and trust an actual trustworthy person. They’re out there. You simply need to ask around. Research Realtors at least as much as you would potential properties to buy. It’s an individual that you need to trust, not a nameplate.

      BTW: There are some really bad lawyers out there. I’ve had the displeasure of dealing with more than one. But that doesn’t mean all lawyers are bad/untrustworthy. One of my best friends, Tom Cole—now deceased—was a lawyer, but one of the worst ever to be called to the bar actually worked for him for awhile…until Tom kicked him to the curb,,, and eventually forced him out of the profession altogether due to some of the downright dirty shenanigans he pulled against Tom and me. He (Malcom X) ended up only being able to get a decent job working for a government agency as an advisor…in Whitehorse!…where the sun don’t shine six months of the year. He was stuck up there for over thirty years. Fitting, don’t’cha think?

      “Revenge is mine”, sayeth the Lord. Mine too!

  7. Alistair:

    I have a bone to pick with your statement “People should not get market information from real estate agents.”

    You should have qualified that statement thus: “People should get market information from just any old real estate agent.”

    Real estate registrants/agents are not a common behemoth entity of single-minded commission chasers. Yes, there are those for whom the paycheck reigns supreme, no matter what must be said to corral same, but you simply cannot tar all with the same brush. There are many Realtors who don’t depend on weekly or monthly commissions to keep them going, for whom their where-with-all financially enables them to treat their vocation as a long-term income generating stream. Not all are desperate for that next cheque, tomorrow. Yes, there are too many who are that desperate, who lie for their business prospects, and like all businesses, real estate sales has its fair share of shysters…arguably more than its fair share.

    The trick is to hire a Realtor who tells you things you don’t want to hear…things he/she ‘knows’ you don’t want to hear. Then you will have a fairly good chance of working with a professional. When I was in the business I routinely told naive first-time wannabe investor/renovators of old run-down properties about the pit-falls of said gambits-for-fools. I was routinely told “Nobody else said that!”

    “How many other Realtors did you talk to?” I would ask.

    ‘One or two.” they would reply.

    Therein lay the problem; a lack of research into Realtors competing for limited business often led to disgruntled clients.

    I, along with others who did not need the money on a regular basis, were able to tell it like it was, warts and all. That was why we did not need a regular, predictable, short-term stream of commissions. We knew we would earn enough over the mid to long term to at least survive, and likely thrive. That was why we did OK as commissioned sales reps. Our financial asses were not on the line at the end of every month.

    Therefore, people ‘should’ get market information from reputable real estate agents, and combine it with other professionals in the realm of the real estate world in order to obtain a reasonably calculated opinion regarding what and when to buy, sell, or sit it out.

    Your personal bias against ‘all’ real estate agents/registrants comes through loud and clear, thus putting your advice in the “take-it-with-a-grain-of-salt” drawer.

  8. Nowadays locals cant afford to own a home period. I have personally noticed a big jump in the prices in the Toronto area during these months compared to 6 months ago. The multiple offer war is still very hot and it makes impossible for working class to even consider owning a small townhouse. Unemployment rate is high but properties are still being purchased with the highest price tag and it makes me sick and disappointed. That says a lot dispite the unemployment rate. Condos are getting smaller and prices are sky high.

  9. Really,
    Realtor are dishonest and lawyers are, right.
    You own your home and talking about real estate future you are not sure of.
    Yes it may drop if interest rate goes back to %18.
    Everyone needs home, it is cheaper to own than rent. Get your facts straight.


Please enter your comment!
Please enter your name here