TD Canadian Housing Foecast Update
The drivers of the demand decline are numerous: Social distancing is a prime culprit, as virtual tours struggle to replace in-home viewings.
Deep, historic job losses are another. On this front, most of the job declines observed during March were in lower wage industries, where homeownership rates are probably lower (Chart 2). This likely softened some of the fallout to ownership housing demand.
Collapsing equity markets have eroded an important source of down payments. This is particularly true for first-time homebuyers, who disproportionately rely on personal savings to fund their down payments. In addition, the nosedive in oil prices is a terrible development for incomes in Alberta, Saskatchewan and Newfoundland and Labrador.
Stalled population growth will test the resilience of investors whose units will be completed soon, as the pool of potential renters will shrink in the near-term. This could force some selling pressure.