Toronto and Canada to lead global markets in post-COVID-19 real estate recovery – ReMax
Canada’s – and Toronto’s – real estate markets will be among the strongest in the world in a post-COVID-19 recovery, according to a new report from ReMax Canada.
A Leger survey conducted on behalf of ReMax indicates that 56 per cent of Canadians who are planning to engage in the real estate market expect to do so in less than a year, showing an eagerness to get back to buying and selling.
Almost half (44 per cent) of Canadians believe the real estate market will bounce back to the strength it was before COVID-19 by 2021. Moreover, 29 per cent believe that before the end of 2020, the market in Canada will return to its pre-pandemic strength.
“While the Canadian market has seen a steep year-over-year decline in the volume of transactions during the peak of COVID-19 this spring, transactions have been happening and prices in particular have been resilient in much of Canada,” Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada, told Condo Life.
Alexander points to data from the Canadian Real Estate Association (CREA), showing that national home sales in May were up 59.6 per cent from April. “Now that economies are beginning to reopen across the country, and in light of some of the recent activity we’ve seen in various cities across Canada, we anticipate that demand could begin to improve much faster than we initially anticipated at the beginning of COVID-19.”
In Toronto, Canada’s largest market, housing demand is already showing signs of rebounding. “The city has experienced an uptick in activity and a number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that is not nearly as dire as some suggested. Actual May 2020 sales increased by 55.2 per cent compared to April 2020.”
“Canada’s housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic that housing market could be restored much sooner than initially expected,” says Elton Ash, regional executive vice-president, ReMax of Western Canada. “As we saw in our 2020 Liveability Report, Canadian communities are resilient and people love their neighbourhoods, showing a collective commitment to bounce back.”
Pre-existing pent-up demand for homes in hot markets such as Vancouver, Toronto and Ottawa may help mitigate the decline in buyers who are suffering pandemic-related job losses, ReMax says. Exceptionally low inventory in much of Canada may also contribute to upward price pressure as restrictions ease and demand increases further.
In line with economists’ predictions, ReMax Canada estimates relative price stability by the end of 2020, with a possible price correction in the single digits. Exceptions include regions such as Alberta and Newfoundland, which are still struggling to rebound from a host of shocks, the dive in resource revenues, and the potential for a second wave of COVID-19.
Real estate technology
The pandemic has pushed the global real estate industry to embrace a variety of technology tools that were previously available but not always adopted to facilitate a transaction. Now, professionals are integrating 3D home tours and virtual open houses into their listing and selling practices. Given that almost half of Canadians (46 per cent) say that in a post- COVID-19 landscape, they’d prefer to work with real estate agents who use technology and virtual services in order to adhere to social distancing guidelines, agents will need to adapt in order to secure and build their businesses.
This sentiment is shared across both the U.S. and Europe, which have witnessed a shift in consumer wants toward a more digitalized homebuying and selling experience, such as e-signatures, virtual meetings and digital paperwork. ReMax notes that in some instances, buyers are still requesting in-person home tours before completing a transaction.