With the prime rate just under 3 percent, mortgage rates in BC could remain stagnant according to the BC Real Estate Association.
Chief Economist, Brendon Ogmundson told Vista Radio the effects of the coronavirus will vary depending on how long this lasts.
“This extends into mass layoffs and a big impact on employment if the trickle-down is a little more permanent and that is going to affect housing demand a lot more but if it’s a short-term thing, there is going to be a lot of pent up demand and everything will come back.”
In addition, the five-year qualifying rate will be just over 5-percent during this time.
The five-year fixed rate is at its lowest level since 2016.
“This an extraordinary situation that probably started in late February or early March and this is due to a frozen economy or paralysis of the economy that demand is kind of still there but it can’t be activated.”
The COVID-19 pandemic has sent interest rates plummeting – but where will they go from here? Find out more in BCREA's March 2020 Mortgage Rate Forecast: https://t.co/QHQYa0EV4n #bcreaEcon #cdnecon pic.twitter.com/QOIJBH9tjs
— BC Real Estate Association (@bcrea) March 30, 2020
Ogmundson is hoping a lot of the aid packages announced by the provincial and federal governments can help families bridge the gap during this difficult time.
He added the north is a lot more vulnerable when it comes to shocks to global trade and commodities like oil and gas.
Ogmundson states the region encountered a similar result in 2015 when commodity prices plummeted.