Feeling uncertain about your real estate plans and financial stability? You’re not alone; the same concerns are affecting homeowners and business operators throughout the Greater Toronto Area. Right now, a lot of people are being cautious and putting off major decisions in order to maintain financial flexibility, which is understandable given these uncertain times. However, just what is happening with the real estate market in Toronto now that we’re amidst the COVID-19 pandemic? Let’s explore the effects in more detail.
If there’s any indication that the real estate market is taking a bit of a pause due to the COVID-19 outbreak, it’s in the figures presented by the Toronto Regional Real Estate Board (TRREB). The organization recently reported that home sales were down a whopping 69 percent, year-over-year, within the first 17 days of April 2020 – right around the time that we all shuttered our doors and started staying at home to help flatten the curve. This market behaviour aligns with provincial guidelines to stay home, keep distance from others outside of household members, and to effectively wait out the high-risk period. Plus, many people have lost their jobs or had their hours reduced. Their hesitation to make any major moves in light of this is likely contributing to this pause as well.
The immediate impact of the pandemic on the Toronto rental market is that April rents decreased 5% both year-over-year and from March 2020 levels. This marks a sudden shift to a renters’ market and can be attributed to the hesitation people have around moving in the middle of a pandemic, as well as economic weakness and uncertainty. Adding fuel to the fire is all the formerly short-term rental units (listed on sites like Airbnb) being added to the long-term rental market, increasing inventory even further.
With uncertainty comes opportunity. If you’re willing to act in spite of this uncertainty, you may be able to find value while others remain on the sidelines. Toronto’s real estate market has shown its resiliency many times in the past, including during the SARS crisis in 2003. Health and safety should be everyone’s first priority, but today’s technology enabling virtual showings and digital signatures can help limit your contact with others throughout the process. So whether you’re a tenant or a prospective purchaser, or even a landlord with a vacancy or someone who wants to sell their property, there may be an opportunity for you to succeed.
If you need help achieving your real estate goals, our team at Medallion Capital Group is here for you. We’re happy to provide well-informed mortgage services, property management and investment advice to help you navigate this challenging environment. Contact us today to understand your options and learn how we can help.