The impact of the COVID-19 coronavirus outbreak is being felt across the world, but what will it do to Canada’s housing market?"

The short answer, of course, is that no one really knows, but the latest assessment of the housing market by RBC Economics suggests that things are about to get rocky.

Senior economist Robert Hogue said that the “light was on” in the housing market in February but that it is “about to be turned off.”

“The world has changed in March,” he wrote in the RBC Monthly Housing Market Update. “And so has the outlook for the Canadian housing market.”

Hogue said that fears of the spread and social distancing are set to decimate house viewings and buyers are likely to take a wait-and-see approach.

Then there’s the impact that Canadians’ investments have suffered from falling asset values. Hogue notes that some homebuyers would be relying on these investments to fund their down payment.

Despite mortgage rates remaining low, especially following recent interest rate cuts and the potential for more, consumer confidence is likely to outrank them.

Sales plunge but what about prices?
Hogue’s outlook is that home sales will plunge in the coming weeks before a rebound at some (undeterminable) point.

But he expects home values nationally to be resilient with tight supply in many markets providing a cushion against correction.

For Toronto, Vancouver, Ottawa, and Montreal, recent price escalations are predicted to cool but there could be tougher conditions for the Prairies where market conditions are softer and the oil price fall will be a further blow.