On March 19th we issued our first COVID-19 announcement upon initial reports of the novel coronavirus entering North America. At that time we revealed that lead volume was holding steady in the rental housing industry despite initial concerns. As "social distancing" escalated and non-essential business closures ensued, renters delayed their search, with the mindset that quarantine would only last a couple weeks. In addition, the banning of short-term rentals has caused an oversupply in the market, thus impacting lead volume.
However, within weeks, more clarity and support on the situation is helping to revive confidence in the rental housing market. The federal government issued the Emergency Response Benefit to support financially vulnerable Canadians, the number of COVID-19 cases in certain provinces has slowed, while renters and property owners are adapting to accommodate the situation (i.e. virtual touring), resulting in lead volume to slowly but steadily rebound.
As we look across the data from March 29th - April 4th (+6.68% nationally) and April 5th - 11th (+3.43% nationally) lead volume is rebounding on both a national and regional level.
To broaden the scope for landlords and property owners, let's look at how lead volume is performing across specific regions and provinces.
From the graph we can see that after a decline in weekly lead volume from March 22nd - 26th, upon business closures and layoffs, leads began to rebound across the country, and in each province from March 29th - April 4th. While our lead volume data reveals continued week-over-week health across the majority of provinces from April 5th - 11th:
Specifically, BC experienced a massive rebound in week-over-week lead volume beginning March 29th - April 4th (+22.59%), while others including the Maritimes (+6.68%), Ontario (+8.48%) and Alberta (+1.75%), also saw lead volume increase that same week. So, why is BC excelling? And what is causing a rebound to occur across certain provinces throughout this time?
As each province experiences varying degrees and responses to the crisis, each will have an impact on the rental housing industry. Tenants and property owners must consider whether they have access to financial support and if they have confidence moving within a given region.
Therefore, there are a few key factors that are clearly influencing lead volume across the provinces. They include:
This pandemic has increasingly become a regional issue. For instance, Quebec has had more difficulty controlling the spread of the virus, with reports of over 12,500 cases in the province (see chart). This has likely correlated with its week-over-week lead volume as other provinces began seeing lead volume numbers rebound earlier. Luckily, from April 5th - 11th Quebec achieved its greatest week-over-week numbers (+6.11%) now that government funding has become available to all Canadians.
Meanwhile, BC has been able to flatten the curve of the coronavirus outbreak much more effectively than many other regions. As we see in the graph, BC has slowed the spread and its numbers remain relatively unchanged across the board. These reports coupled with early reports of financial aid provided a more optimistic outlook for the rental housing market.
As early as March 31st, the provincial governments in BC and PEI informed renters that relief was coming. While in Ontario all evictions were halted and compensation was available to landlords for each day evictions were not given. From March 29th - April 4th, all three of these regions: BC (22.59%), Maritimes (6.68%), and Ontario (8.48%) experienced a jump in week-over-week lead volume. These announcements likely played a major role in lead volume health, unlike those who did not provide clear direction regarding the situation for renters and landlords.
As of March 23rd, many provinces requested that property owners reduce in-person tours as social distancing measures increased. Therefore, owners/operators and renters were pushed to adapt and go digital. As property management firms and prospective tenants were made aware of these new regulations, the infrastructure to support virtual touring was being built and then promoted in new marketing communications. Given the availability of new tools currently being rolled out, renters now have more access to prospective properties than they did only 3 weeks ago.
And it's working.
According to Local Logic, Canadian real estate portals are reporting an increase of between 200-500% in requests for virtual home tours as the pandemic has taken hold.
It's clear that financial support and government response, coupled with the number of COVID-19 cases being reported in the media, is influencing market optimism and lead volume numbers. Now that aid is in place and each province works to flatten the curve through stricter regulations and imposing infractions on those not self-isolating, it is likely that we will continue to see lead volume progress.
In addition to this, as landlords and renters adjust how they show and view properties, more trust in the process will increase. While things continue to remain uncertain, it's clear that as the market adapts to this situation, there is resilience in the rental housing industry. There also appears to be a long sought after revolution of the property/renter relationship, and how strength in communication and accessibility will play a role moving forward.
Sources
https://globalnews.ca/news/6755825/rent-april-1-help-tenants-canada-coronavirus/
https://globalnews.ca/news/6800797/rent-supplement-coronavirus/
static.locallogic.co/blog-assets/LocalLogic_Real_Estate_Canada_COVID19.pdf
https://dailyhive.com/vancouver/quebec-coronavirus-cases-april-14