Here's how COVID-19 might affect home prices in Canada
Given how so many industries — and the economy at large — have been devastated by the COVID-19 pandemic, many would-be homebuyers are wondering if the notoriously hot real estate markets of some Canadian cities will likewise be impacted.
As people become more financially cautious in light of recent layoffs and business closures, and things like real estate showings become obsolete in a time of social distancing, it makes sense why some would expect housing prices to fall under current conditions.
After COVID 19, I’m waiting for these real estate prices to go down so that we can finally consider buying a home— CHOSEN ONE (@Kwasi_KC) March 26, 2020
Experts agree that the country's housing market will be inevitably changed by the fallout of the novel coronavirus — it's just a matter of how much, and in what way.
Canadian real estate company Zoocasa says that the market may experience a cooler spring than usual as buyers hold off on acting during an economically precarious time. But, it remains optimistic, as some people still, quite simply, have to move during this time.
Also, the company notes that demand isn't easily swayed in select bigger markets, where housing has been expensive and in tight for supply for a long time.
"Fundamentals of the housing market, especially in large cities such as Toronto and Vancouver, generally don't change," a Zoocasa analysis reads, though things may feel a little uncertain right now.
Attended a session on real estate & covid 19 (virtual webinar) last night. Panel of experts. Short story: no one really knows what will happen with prices, liquidity, length of disruption, future of co-working...comments all of the map. Interesting times...— Rodney Wilts (@RodneyWilts) March 25, 2020
The company has looked back to the housing market during the 2008-2009 recession for comparison, noting that though home prices dropped significantly in a very short period during that time — a reduction of 8 per cent across the country, on average — they trended back up and continued to rise as the economy as a whole stabilized after-the-fact.
"The market will experience a strong bounce back once the health risks have subsided," the analysis predicts. But, those who do not need to urgently move at the moment likely won't act until that time, leading to a potentially softer market in the immediate future (something people in the Toronto market are still waiting on).
Given the ridiculous house prices in some parts of the country, if you have the means and intent to purchase, the next few months may just be the best time to try and do so — but don't expect the good times to last, unless you're a seller.
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