How the Coronavirus is Affecting the Real Estate Market
The real estate market will continue to be affected by COVID-19, especially with social distancing measures in effect. However, despite the current economic and health crises, all housing types have significantly increased from March 2019 and house prices are continuing to rise. Thus proving that Toronto has a strong market foundation and a demand for housing. We interviewed Naanan Sathiya, the Lead Broker & Founder of C21 Innovative Prime Home Realty Inc, and he said
“It’s challenging at this time to make any predictions on how this outbreak will impact the overall real estate market, or the economy as a whole for that matter. It really all depends on how quickly it can be contained.”
Read below to learn about the current real estate situation in Ontario and Canada.
Mortgage and rental payments are being deferred and missed
The province of Ontario has deemed eviction illegal during this pandemic. CMHC has stated that mortgages can be deferred up to 6 months. However, there has been no specific measures put in place to help tenants pay for rent or for landlords to let renters defer payments. Renters have been advised to discuss their financial situation openly with their landlords and ask for rent payments to be deferred due to COVID-19. Luckily the government of Canada has implemented lots of income support measures for Canadian businesses and families including $82 billion dollars. However the financial aid won’t be available to help tenants pay for their April 1st payment.
Low interest rates enticing some home buyer sales
With interest rates dropping, some homeowners are now flocking to buy a home while they can still afford it. However, many homeowners are staying put until the Coronavirus dies down.
Banks aren’t willing to give loans to high-risk customers
We spoke with Naanan Sathiya, the Lead Broker & Founder of C21 Innovative Prime Home Realty Inc, and here are his thoughts on this subject. He said,
“We are almost certain that banks would be quite reluctant to issue mortgages under such conditions, because employment longevity can become unpredictable in almost all sectors. Additionally, people generally would not want to take on large debts, during such uncertain times. Hopefully something concrete is available soon to help mitigate the economic implications of this pandemic.”
Virtual home tours are the new norm
The Ontario Real Estate Association has mandated all in person viewings to be cancelled, or delayed to reduce the spread of the Coronavirus. With social distancing regulations in place, real estate agents have had to start implementing virtual house tours, virtual office hours and digital contracts. Instead of visiting a house before purchasing homebuyers are given a 360° video tour video of the home they want to buy. This definitely is not ideal, but high resolution technology has made this easily accessible to real estate agents and home buyers or sellers. Lastly, to avoid selling or buying virtually many homeowners have postponed their showings or cancelled them for the near future.
Real estate agents and companies will have to continue to be creative with new virtual selling methods
Agents and real estate companies will have to continue to pivot their business models and adapt to virtual selling methods. Comment below and let us know your thoughts on the current real estate situation and how the Coronavirus has affected you.