The Multi-family Market Evolves for Changing Times

Thanks to Dr. Bonnie Henry and her leadership, we frankly have been relatively fortunate in BC. Of course, for those grieving the loss of a loved one there is not much solace in the flattened curve. Regardless of the progress, there may not be a “getting back to what was normal” regarding the pre-coronavirus market.So, we have ceased using the word ‘normal’.It has not been easy quelling the desire for “getting back to normal” and the false security that promises, but we must.

As I contemplate the remainder of 2020, the difference between the words ‘fad’ and ‘trend’ came to mind. It is common to use these words interchangeably.They are not. Fads are short-lived and trends have longer-term implications.COVID-19 fads may include: increased drive-in theatre attendance; accelerated at home liquor consumption; concentrated hoarding of commodity items such as toilet paper and flour, etc.Trends may include: decreased levels of international travel; continued levels of home cooking and baking; increased desire for lower-density living in terms of neighborhood and housing, desire for more space at home; and “telecommuting,” or working from home.

Since “telecommuting” came into prominence in the pre-Internet 1970’s, I see it as a dated term.In the UK, it is now referred to as “mobile” or “remote” work. Simply put, it is a work arrangement in which employees do not commute or travel to a primary central place of work.According to a Reuters poll, approximately “one in five workers around the globe, particularly employees in the Middle East, Latin America and Asia, telecommute frequently, and nearly 10 per cent work from home every day. It would appear that, this is trend that is not going way post COVID-19, and North America is basically catching up. Thus, it is my view that the very nature of work life and home life is being shaped before our eyes, and this will have lasting implications. According to CTV News, 65 per cent of Canadians working from home would like to continue doing so post-COVID in some capacity. Sounds like I am not alone in this view.

The first-time buyer, investor, and downsizer exodus or “flight to affordability” has been a trend in the new multi-family market for the past decade.This trend is now expected to further accelerate as employees have less pressure on them to make commute time and “transit accessibility” the primary driver of their housing decisions.Of course, many will continue to live in central areas like downtown Vancouver, but many will also find their housing needs have changed. Living close to work every day is no longer worth the cost. In addition, select employers may elect to reduce the cost of the central premises and opt to establish cost effective, smaller yet spacious office hubs throughout the region and promote continued working from home.

Remember, real estate is considerably less expensive in the suburbs/Fraser Valley and will continue to be so, and multi-family homes there tend to be relatively more spacious. This trend, combined with construction of roads and transit improvements, will make the central offices more accessible when needed.

In conclusion, in a similar bent to the BC Real Estate Association, we project that the market will not fully recover in 2020, but buyers will be active and up to 50 per cent of the market losses in the second quarter of 2020 will be restored, provided a second wave is avoided. If we listen to Dr. Henry, even when the numbers want to tell us to relax, all will be relatively well.