The April stats were released this week from the Toronto Real Estate Board and as bleak as it may look with sales down 67%, home prices remained at April 2019 levels. There was also a report put out by CMHC (Canada Mortgage and Housing) that suggested Canada’s real estate prices probably wouldn’t return to pre-covid levels until the end of 2022. The experts reject that bleak outlook suggesting national outlooks do not necessarily reveal regional, municipal, or even neighbourhood distinctions, and some experts say Toronto’s prospects may not be so bleak.
Is the Worst Behind Us?
RBC Economics suggested that the worst may have passed with April being the low point for housing resales now that the economy is showing signs of starting back up. If the economy opens up, buyers and sellers might start engaging with the housing market again, bringing an uptick in sales. For some, the prospect of waiting to move is not an option. Whether they’ve already sold a home pre-COVID-19 and need to buy, they need to access their home equity to keep their business operating, or they’ve been laid off and need to pay the bills, the property market will need to continue operating in order to serve these individuals.
While people may fear that the resources for purchasing or selling a home won’t be available, this is not the case. Homebuyers and sellers will have the support needed during their real estate process. As a result, a lack of resources will not be a factor in slowing down the market. The Bank of Canada has announced a decrease in its benchmark interest rate, putting the current rate at 0.25%. Buyers can now borrow a larger amount of money for mortgages and pay less interest over time. For those who have retained their jobs and have a down payment on hand, they will be in a strong position to leverage lower interest rates to make a down payment on a home. While markets have shifted, the long-term impacts on Toronto real estate prices remain to be seen.
Don’t forget its Mother’s Day this Sunday. In these challenging times and thanks to modern conferencing apps it’s possible to stay connected and spend time together even if you can’t be in the same room. To all the moms, thank you!