Canadian Real Estate Market Update
Monday May 04th, 2020Share
With the current impact of the COVID virus there is understandable concern across the country
f how the real estate market will be impacted. Different cities have experienced unique fluctuations
with this being such a diverse industry. Toronto, Montreal, Ottawa, London, Edmonton and
Vancouver were all covered in our REC Brunch yesterday. Here is a recap of how the pandemic
has impacted each market.
We still remain in a seller’s market in Toronto with at least 2 months of inventory to hold onto.
We have been able to maintain a strong degree of comfort for values in the GTA as we have not
been delivering half of what we need to reach our required supply year over year. Nothing has
changed in market dynamics or demand, the market has kept solid. We are just in a pause for
the time being, and we predict everything to keep on track as usual when everything reopens.
Montreal is in a state of lockdown along with the rest of the province. They current only have
priority transactions, meaning they can only show properties that plan to conclude in a sale by
July 31. This has inevitably caused a dip in sales, as it’s difficult to get buyers to commit in such
a short window. New listings cannot be shown right now, which is being fought by the association
and slowly they are making ground to return the sales process to normal. Developers have been
offering discounts for pre-construction condo investments at 5% in order to keep a strong sales
volume. Confidence from buyers has staggered, but is still generally positive. Montreal still remains
at a seller’s market, sales were even stronger at the beginning of 2020 than they had been years
prior. If you have comfortable finances, buying in Montreal is still a wise choice. Worst case scenario
for the end of this pandemic is a 5 - 7% decrease in values, but 1% is more likely.
Ottawa was on a huge upswing with a prominent seller’s market before COVID-19 emerged. A
minor decrease in showings, listings and sales expectantly marked April. The market impact has
been minimal, so an upcoming price drop is likely, but likely minute. Strong immigration due to
government jobs and a large degree of post-secondary students is what has kept the industry steady.
Many students have gone home, but the inventory is still being absorbed. Buyer confidence has
decreased, and most likely won’t readjust for a year.
London, Ontario has continued to remain very strong during the pandemic. They have a strong seller’s
market with approximately 1.8 months of inventory. Property sales are not an issue, as they are seeing
an average of 8 days on market. There is a big increase in demand as savvy investors are seeing the
opportunities which will likely greatly increase in value after the quarantine is lifted.
Edmonton has remained cash flow positive for investors. Prices won’t drop dramatically thanks to
strong occupancy rates. Many people are holding onto their assets at this time, so it’s unlikely to see
any resale opportunities in the coming months. A large degree of year (and longer) leases have been
signed last month, as demand to live there hasn’t staggered.
Vancouver experienced its first dip in inventory in years thanks to the quarantine. Similar to Ontario,
open houses have now switched to being virtual to slow the spread of the virus. Just like Toronto, there
is a continuously widening housing deficit which has kept prices increasing. The low interest rates and
limited supply demonstrate an opportune time to invest. Prices will hold for the time being, but are
very likely to increase in the coming months.
We'll continue to keep you updated on what the real estate market is doing to adapt to these times.