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Let’s look at some of the changes taking place in the Ontario Real Estate market :

Changing Markets

The pandemic has prompted many Canadians to reassess their living situations. According to a survey 32 per cent of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.

No More Open Houses

During March 2020 the President of the Ontario Real Estate Association released a request for all Realtors to stop having open houses. Even before the coronavirus pandemic, virtual 360-degree interactive tours and video tours were already being used to promote MLS listings; in the midst of social distancing measures, these have now become a necessity for agents to showcase properties. Agents are reaching for these digital tools to help homebuyers get a feel for their listings, then are choosing to only provide in-person tours for vacant properties, and to a very limited number of people. Hand sanitizer and masks are offered liberally at most properties.

Lowered Interest Rates

To protect the country against the economic implications of the coronavirus spread, the Bank of Canada cut interest rates a total of three times over the month of March, bringing the overnight lending rate to 0.25 per cent – the lowest it has been in years. Canada’s big banks followed, with hefty cuts to their prime rates, making it easier for Ontarians to secure an affordable mortgage or line of credit.

These bank rate cuts were, regrettably, a limited-time offer. By the end of March, most banks had raised their prime rates back up to pre-crisis levels, in response to the increased financial risk posed by COVID-19-realted business closures and job layoffs across the country.

That’s not to say all hope is lost for future homebuyers. It is likely that once workplaces resume operations following the crisis, bank prime rates will dip back down again to align with the Bank of Canada. With many banks also offering to defer mortgage payments during the worst of the pandemic, these financial measures  will help reinvigorate local real estate markets across the Province.

Low Inventory Creates Higher Prices

Ontario’s real estate markets across the province is currently in a Strong Sellers Market, due to a dwindling supply of listings which are failing to keep up to demand. Thanks to low unemployment rates, increasing population and strong economic growth across the province, this trend is projected to continue to the end of 2020.

Despite leaving its mark upon the real estate industry, it is unlikely that the coronavirus will have enough of an impact to tip the scales toward a buyer’s market. Given the isolation measures and the growing safety concerns due to COVID-19, many agents are working solely with clients who were already within their sales pipeline, advising other clients to press pause on their home-buying goals until later in the spring. For this reason, home sales have stayed steady within many areas across the province but will soon begin to show signs of dipping as these transactions draw to a close.

A double-digit percentage increase in the number of Greater Toronto Area houses sold last month shows the region’s property market is “quite fine,” according to analysts, as it rebounds from mortgage controls introduced last year that sidelined some buyers.

An improving economy, low borrowing costs and pent-up demand from the lockdown months are all fuelling this sales surge. As well fewer residents went on vacation, boosting activity in what is normally a slow month for housing, said TRREB president Lisa Patel.

In a continuation of a trend seen since the pandemic, detached and semi-detached homes drove the sales growth, rising 50.6 per cent and 66.8 per cent, respectively. Condo sales rose 10.9 per cent, TRREB said.

Housing sales in the GTA rose 13.4 per cent in August compared with the same month a year ago, the Toronto Real Estate Board said in its monthly report. There were 7,711 homes sold versus 6,797 in August 2018, it said.

Constrained Consumer Confidence

An Angus Reid survey released in late March suggested that between 42 and 47 per cent of Ontario households have reported work or job loss as a result of COVID-19. With nearly a million Canadians applying for employment insurance (EI) over the month of March, it comes as no surprise that the economic fallout of this public health crisis will be felt across the country. With some signs of decreasing sales volume surfacing within some of the province’s key markets, it is expected that until consumer confidence returns, demand will continue to soften.

It remains uncertain whether interest rate cuts will be enough to reinvigorate demand within the Ontario housing market to pre-crisis levels. However, many within the industry are confident that the low inventory supplies across local markets province-wide will continue to hover below demand, and thus the seller’s markets will prevail.

Buyers Face Mortgage Choices

While Ontarians are still grappling with how long these social distancing measures and business shutdowns will remain in place, there is comfort in remembering that these measures are temporary, and that this pandemic will pass. The faster that we are able to collectively fight the spread of COVID-19, the more quickly we can snap back into our daily lives and return to our post-coronavirus priorities.  Should this snap-back take place in the next few months, following China’s trajectory, then there is hope that those who have pressed pause on their home search will flood the market, making for a hot summer: outside and inside the Ontario real estate market.

Canada Real Estate Market Overview

If you are forced to move or relocate, you may have to break your agreement with your lender early. Depending on how much time you have remaining in your term, the penalty for doing so can be up to 4% of a mortgage with a fixed rate. On a $500,000 mortgage, that would be $20,000.