Why is Real Estate an Essential Service?
Friday May 08th, 2020Share
With social distancing advisories and non-essential business closures in place, many people – some realtors included – are scrutinizing whether real estate is an essential service as it has been classified in many regions across Canada and the US. Those who argue against the essential classification are coming from a good place, with hopes that more-stringent lockdowns will stop the spread of COVID-19. On the surface, shutting down such real estate services as those provided by agents, lenders, lawyers and land registry offices may seem like the sensible thing to do given the current climate. However, the unintended consequences would be detrimental to many people and for many reasons.
Real Estate as an Essential Service
The fact is, real estate is an essential service. This is something that RE/MAX leadership has lobbied hard for, for the right reasons. Alongside food, water and clothing, shelter is one of life’s basic necessities. While agents are advising their clients to “hold off” on selling their homes right now if they can avoid it, it’s important to recognize that under certain circumstances, waiting is not an option.
When Moving is a Must
Someone has already sold their home, and must now find a new place to live. Many of Canada’s housing markets were in seller’s territory in early 2020, prompted by low housing supply and growing demand. This motivated many homeowners to list.
A homeowner has to sell their existing home to finance the new home they’ve already agreed to purchase. Precluding homeowners from selling would have a detrimental domino effect.
A family is living in a precarious place, with no choice but to move. Factors such as neighbourhood crime or unsafe conditions inside the home itself may have forced a decision to move.
A homeowner has to liquidate their home equity in order to finance their business or their life. Social distancing measures mean many businesses are suffering huge losses. Furthermore, Canada’s unemployment rate in March 2020 rose to 7.8 per cent, up from 5.6 per cent in February 2020. Incomes are down. Meanwhile, the monthly bills continue to roll in.