Introduction

The COVID-19 pandemic has caused unprecedented changes to the Vancouver housing market. With lockdowns and restrictions in place, many individuals and families have re-evaluated their housing needs. Furthermore, the economic impact of the pandemic has led to job losses and financial uncertainty, resulting in changes to how lenders evaluate mortgage applications.

Impact on the Vancouver Housing Market

The Vancouver housing market has seen a significant downturn since the onset of the pandemic. According to the Real Estate Board of Greater Vancouver (REBGV), the total number of homes sold in 2020 was 30,944, a decrease of 22.1% compared to 2019. Additionally, the average price of a home in Vancouver has decreased by approximately 3.6% in 2020, compared to the previous year.

Decrease in Demand

One of the primary reasons for the decline in the Vancouver housing market is a decrease in demand. With lockdowns and restrictions in place, many individuals and families are hesitant to make significant financial commitments, such as purchasing a home. Furthermore, the pandemic has led to job losses and financial uncertainty, causing individuals to hold off on making major purchases.

Decrease in Supply

Another factor contributing to the decline in the Vancouver housing market is a decrease in supply. With restrictions in place, many homeowners are hesitant to list their homes for sale, leading to a shortage of available properties. Additionally, the pandemic has caused delays in new construction projects, further exacerbating the shortage of available homes.

Shift in Housing Preferences

The pandemic has also led to a shift in housing preferences. With remote work becoming more common, individuals and families are re-evaluating their housing needs. Many are looking for larger homes with more outdoor space, as well as properties located in less densely populated areas.

Impact on Mortgage Lending

The pandemic has also had a significant impact on how lenders evaluate mortgage applications. The economic uncertainty caused by the pandemic has led to changes in the criteria used to evaluate applicants, as well as a decrease in the availability of mortgage products.

Changes in Lending Criteria

Lenders have become more cautious in their lending practices due to the economic uncertainty caused by the pandemic. Many lenders have increased their minimum credit score requirements and are requiring larger down payments from borrowers. Additionally, lenders are scrutinizing the stability of the borrower's income and employment more closely than ever before.

Decrease in Mortgage Products

The economic uncertainty caused by the pandemic has also led to a decrease in the availability of mortgage products. Some lenders have discontinued certain products, such as high-ratio mortgages, while others have increased their interest rates or added additional fees.

Conclusion

The impact of COVID-19 on the Vancouver housing market and mortgage lending has been significant. The pandemic has caused a decrease in demand and supply in the housing market, as well as a shift in housing preferences. Furthermore, lenders have become more cautious in their lending practices and have decreased the availability of mortgage products. While the Vancouver housing market is expected to rebound in the long term, it is important to remain cautious and informed when making any major financial decisions.