The current red-hot housing market is likely to slow down slightly when normal life resumes after the pandemic – although increasing immigration numbers may help offset some of that cooling-off, according to VERICO’s president and chief operating officer.
Mark Squire (pictured) told Mortgage Broker News that the market, while “quite unbelievable right now,” has been spurred largely by high demand for housing linked to the pandemic. “People that are working cannot go anywhere, so they are renovating or purchasing new homes or cottages,” he said.
“Will this continue once things return to normal? My perspective is that the housing market may cool a bit as people find new places to spend their money. That said, as the Canadian economy opens back up, we will start to see an increase in immigration again, which also supports and promotes housing sales.”
Rapidly rising house prices, coupled with that demand far outstripping supply, have led to some calls for the Canadian government to intervene to reduce the risk, raised by the Royal Bank of Canada, of “overheating” in the market. Squire noted that imbalance, not just in the oft-referenced Toronto and Vancouver markets, but throughout Canada.
“The market is quite unbelievable right now, and what I find truly interesting is that it’s not just the Greater Toronto and Greater Vancouver markets – it’s pretty much across the entire country,” he said.
“We’re witnessing a seller’s market, where the active listing to sales ratio is not balanced in seven of the 10 provinces.”
Still, he said that potential government intervention in the housing market could prove a “double-edged sword” in the long run. “The housing market represents 10% of Canada’s GDP,” he said, “and when you look at it from a global perspective, housing in Canada is considered affordable on the world stage.
“I think something that we all need to come to terms with is that owning a house in Canada is not a right, but rather a privilege, and maybe not everyone will be able to enjoy that in their lifetime.”
Squire said that VERICO had seen a strong start to the year, propelled by that red-hot housing market, although he cautioned against making premature predictions for the rest of 2021. “The first two months… have been very strong, but let us keep in mind that the market is extremely hot right now,” he said.
“Our submission volumes for January and February were up over 90%, year over year. It really is hard to wrap your mind around it. We are well on track to exceed our impressive results from 2020; however, those results are to the end of the second month, and there is a lot of year left.”
Squire also weighed in on the debate currently spreading through the mortgage industry about technology platforms and the extent of freedom afforded to licensees to choose their own. “Our belief [at VERICO] has not changed,” he said. “‘Your business, your brand, your way.’ We are about choice – your choice.
“It cannot be your business if someone is telling you what to think or what to do. We say, ‘you’re in business for yourself, but not by yourself,’ meaning we are here to support you and provide you with tools, programs, and technology options all ‘a la carte.’ Most of these options are included in the monthly flat fee that the licensee pays, but again, it’s about choice – the broker owner’s choice, not ours.”
Squire said that despite VERICO’s swift reaction to the unique challenges posed by the pandemic, he would welcome a return to normality. “We quickly adapted to Zoom meetings and hosted various webinars throughout the year,” he said. “We participated in the virtual Mindset conference, and held many sessions with industry leaders, as well as several education sessions profiling some of our members.
“In the end, nothing replaces the human-to-human contact that we are all missing.”