Canadian realtors are working overtime after closing a second month of record MLS sales in September.
Buyers in solid financial positions continued to purchase and created an extremely competitive market in B.C.’s Fraser Valley; the Agassiz/Harrison area was top of the list for thousands of buyers wanting to remain close to greater Vancouver. . National home sales were up 46 per cent year over year this September. Residential migration tell us that rural detached homes offering large lots or acreage and privacy are being sought out.
Why are so many people moving amid a national health and economic crisis while others are anchored to the security of their current home? 2020 will be known for many tragic happenings, including the “great displacement and impoverishment of the middle-class Canadian.” What began in April can be likened to a runaway train that has swept up thousands of unwilling passengers on its now speedy course to the next stop – market correction.
National rents stats show a declined of 9 per cent, and second quarter Vancouver rents declined by 17 per cent! Condo inventories continues to increase and soften the multi-unit market as a record number of newly-completed units in B.C. are now ready to sell. So, how does the predicted insolvency derail all the efforts of money printing and stimulus deferrals? CMHC only insures mortgages under a $1 million pointing to the middle class as the biggest demographic of these percentages. November will be the beginning of the end of home ownership for those who are 90 days delinquent and 6 months deferred. Lenders will have no choice but to begin foreclosures.
Furthermore, The Bank of Canada has now announced that it is putting an end to Canadian Mortgage Bond Purchasing Program (CMBPP) at the end of October. The exit of the CMBPP leaves long-term collateral damages like double-digit price growth and widens the wealth inequality gap between renters and asset holders even further.
Wealth or income distribution is directly related to how well the economy functions and the everyday uncertainty in which we continue to exist has transformed the existing affordable housing crisis into a Canadian crisis of poverty. Homelessness is a reality that we don’t see reported on as it doesn’t fit the narrative needed to bolster economic confidence. The low income working poor that survive day to day and month to month and are becoming a large statistical group labelled collateral damage of BOC pandemic liquidity stimulus that was designed to ensure that asset holders could weather the storm and keep their homes.
Many people are now losing their homes and apartments after job losses that are now permanent and it is yet to be seen if those citizens are able to find low-income rent or face homelessness. One-third of British Columbians struggle to pay their bills, while one out of five children in B.C. already lived in poverty even before the pandemic began. With our cost of living to only rise, people once considered middle class, with high debt ratios, already living paycheque to paycheque may be hard pressed to avoid becoming the working poor.
There needs to be more dialogue about what is the actual cause of the homelessness, which is impoverishment. At a time when the federal government deemed the Canadian Emergency Response Benefit needed to be $2,000 a month for the average Canadian to stay housed and well-fed during this pandemic, the current unemployment and social assistance rates fall way short of that figure.
B.C.’s once thriving middle class has been under an economic assault for several years. Record job losses in the forestry/lumber mill and oil and gas sectors began in early 2019 due to environmental pressures and International trade policy. Those permanently curtailed positions that paid middle-class wages once sustained many B.C. residents in a comfortable middle-class lifestyle.
Our incumbent NDP Government just won another four-year term to steer the province financially through the pandemic and into economic recovery. They did not campaign on revamping the forest industry to reopen mills or badly needed oil and gas sector projects and yet they need to create thousands of good-paying jobs and offer retraining for those affected to begin to turn the economy around. The NDPs says it has a plan for B.C.’s future in this global green electronic age. If the way forward is with electricity generated from renewables like solar and wind and hemp fibre production and processing, then these industries must create jobs that can replace and sustain citizens across the province.
In conclusion, electric cars, solar energy generation and smart homes that generate their own energy needs are all great ideas to improve our planet, but this huge shift away from economy-building industrial mainstays during the pandemic has put B.C. citizens and businesses on a tougher road back to financial stability. We can only hope that the middle class that the government counts on for growth spending will still be around to enjoy the electric future they have planned for us.
Freddy Marks, together with his daughter Linda Marks, runs Agassiz’s 3A Group Sutton Showcase Realty. He has been a Realtor in Canada and Germany for more than 30 years, and currently lives in Harrison Hot Springs. Read the complete column online at www.agassizharrisonobserver.com.