Canada’s real estate market is on the throes of a slump in sales as the country grapples with the unprecedented coronavirus pandemic that has swarmed across the country. In the time of social distancing and mandatory quarantine, the property sector is trying its best to come up with ways to keep their sales figures rolling.
The real estate picture in Canada was optimistically bright in the initial months of 2020. Home sales went up by a whopping 45.6% in Toronto for February as demand surged from both investors and homebuyers. The Greater Toronto Area’s top-tier real estate market was poised for significant gains in the spring prior to the emergence of Covid-19.
Residential real estate sales soared 107%, clocking more than $1 million year-on-year in January and February while luxury sales surged 75%, registering over $4 million.
Consumer confidence levels were warming up and sales activities were anticipated to topple 2019 figures.
However, everything went up in smoke as the contagion sent shockwaves around the country forcing major cities to shut down at a time prior to the busiest weeks of the year in real estate.
The Greater Toronto Area witnessed a drop of 37% in sales this month after a strong February. Adding salt to the wounds was a 27% increase in canceled listings as job losses peaked with industries coming to a screeching halt with the mushrooming of the virus.
However, housing experts in Canada are unfettered by this sudden emergency. They opine that it’s too early to say whether Covid-19 has triggered seismic changes in the industry.
A wave of optimism is working on the minds of real estate developers that the red-hot demand for housing prior to the pandemic will continue. And the full economic impact of the virus will be known about a month from now.
The country is also witnessing a housing shortage and buyers are upbeat about buying properties when the interest rates are at rock bottom.
Canada is witnessing the lowest mortgage rates on record. The Bank of Canada slashed interest rates thrice in March bringing the benchmark to 0.25 percent which led to the country’s top 6 banks to lower their prime rates that weigh variable mortgage rates.
Lower mortgage rates can fuel strong demand for resale homes and primary properties in the Canada market. These pro-active financial sops can act as a cushion for the economy. Though looking at the current uncertainty, perhaps it will take more than cheap rates to lure homebuyers to make investments and boost the property market.
The overall picture
The Canada real estate market is confronting the period of Covid-19 turmoil sitting on a strong foundation. The pent-up housing demand of 2019 showed itself in the early months of 2020, registering astounding sales figures which are reflective of the strong market fundamentals of the property sector.
Dramatic shifts in mortgage qualification regulations in 2020 have boosted the purchasing power of home buyers and real estate investors and bolstered confidence in the real estate sector. Moreover, the drop in mortgage rates has led real estate consumers to invest in primary homes and rental properties. They want to cash in on a lifetime opportunity.
It cannot be overshadowed that despite the rosy beginning of Canada’s real estate market in 2020, it is struggling to zoom ahead in the light of Covid-19 crisis. Though the situation is not uniform all Canadian cities, considering the diversity of the real estate market, real estate developers are adopting new strategies to market properties, with virtual reality tours, 3D mapping taking the cake among them.