ONE YEAR LATER
HOW HAS COVID AFFECTED THE REAL ESTATE MARKET?
We now find ourselves one full trip around the sun into this pandemic which is giving us an opportunity to pause for reflection. The last twelve months have brought significant personal and financial loss for many families, and no one was immune to the overall life stress that lockdown after lockdown has created.
While some of the dire predictions made this time last year have become reality, the Toronto housing market has actually defied the naysayers and soared. In fact, the President and CEO of Canada Mortgage and Housing Corporation (
SO, WHY IS CANADA’S HOUSING MARKET STAYING STRONG?
The truth is that the Toronto housing market was incredibly strong pre-pandemic. So while we did see a decline in both home sales and prices in the second quarter of 2020, when our Government first imposed the life-saving restrictions, by the end of the third quarter home sales and new housing starts recovered to beyond pre-pandemic levels. All of this despite the pandemic continuing. It’s been surprising.
For instance at National Homes, our recent launch of Phase 1 at Tyandaga Heights on the Park was one of our most successful ever with over 8,000 families registering for the community, selling-out extremely quickly and people are already lining up in anticipation of Phase 2.
The recent release of the CMHC’s report “Housing Market Insight Canada’s Major Markets” takes a deeper dive into the reasons why Canadian home sales currently exceed most forecasts for other major cities.
We’ve summarized the top five reasons for you here:
- Mortgage deferrals delayed the need for some Canadians to sell homes despite their economic challenges, so when the Canadian home market recovered, new sales outpaced new listings.
- More sales and fewer listings encouraged price growth across the market. This is definitely a reflection of the uneven distribution of impact across the economy. Higher income families were able to adapt, work from home and had fewer job losses which meant they could buy homes.
- As lockdown restrictions were lifted, pent-up demand that built up in the second quarter accounted for a large share of the increase in third-quarter sales.
- Stuck-at-home families were not spending as much as usual which meant our overall household savings rate rose to historic levels in the second and third quarters of 2020. This meant more money was available for down payments.
- The overall reason though is faith in the housing market. Canadians feel confident that mortgage rates will remain low and that if we can weather a storm of this magnitude then investment in real estate is truly a safe bet.
No one knows what tomorrow will bring, these are unprecedented times. The sustainability of the Canadian housing market of course depends on the course of the pandemic, mortgage rates and the overall economic stability of the market. At National Homes, we are moving full steam ahead with new communities in desirable neighbourhoods at prices below the national average.