The crisis bugle has been sounded in Canada’s real estate sector. The sector which had a phenomenal start in 2020 with real estate sales trumping previous records, is now grappling with a situation it hasn’t witnessed in its history.
Canada’s real estate sector is the largest industry in the country and a major economic driver. A lot rides upon the health of the sector, which is considered the most prosperous and infallible by Canada’s economists. Canadians consider investing in real estate as a better store of wealth than gold.
However, these theories are put to test suddenly by an invisible pandemic. Sales and listings in the past few weeks have taken a dent as social distancing measures and lockdowns to contain the virus spread kept clients and serious homebuyers indoors, chilling the expectations of a strong spring season.
Sales activity in Canada’s largest property markets saw a slide with GTA taking a larger portion of the brunt at 28%. Montreal saw its sales plummet by 13.3% and Greater Vancouver contracting 2.9%. Calgary, Ottawa, Edmonton, Winnipeg and Hamilton-Burlington too witnessed declines.
Looking at the way things are spiraling downwards; Canada’s policymakers took to task to buttress the real estate market. The Bank of Canada slashed mortgage rates thrice, pulling it down to 0.25% and offered mortgage holidays to landlords who had taken multiple loans for property investments.
Property prices hold good
The good news is amidst buckling real estate sales, properties haven’t seen any price corrections, but managed to rise 0.8% in March. Economists reiterate that a decline in the number of newly listed properties have acted as a firewall for property prices to remain stable. On top of that, the emergency income and wage subsidy programs by the federal government have helped homeowners to postpone their home trading for the moment.
New rules for home trading announced
The declaration by the government of Canada to designate real estate workers as essential ones and land registry offices to function normally come as a good tiding for the real estate sector as it tries its best to cash in on the spring market.
However, property trading won’t be the same before in the wake of this virus scare. Open houses have been discouraged and buyers are taking no chances of making personal property visits for health reasons.
Technology has become a catalyst in these trying times, enabling virtual property walkthroughs and digital transaction procedures. Digital visits are becoming the new normal and realtors are putting virtual home tour features on their websites to facilitate this trend.
Canadians put much weight on physical home inspections before inking a property deal. While physical examinations are not a problem for condos as buyers rely upon condo’s status certificates which gives a picture about the physical and financial health of the property, for other properties, inspections are necessary.
Realtors have provided home inspectors to survey every inch of property and scope for structural shortcomings which may not be visible during virtual tours. The inspectors wear hazmat suits with latex gloves and carry respirators while going for property inspections. After the inspection is done, clients are communicated electronically and transactions along with signatures are done digitally.
Closing day traditions are called off and real estate developers are providing lockboxes to sellers so that buyers can obtain the keys on the property premises only.