As things move forward and we transition into the “new normal”, the effects of COVID-19 on the real estate market will not be seen immediately. While markets have shifted, the long-term impacts on Toronto real estate prices are yet to be seen.
The real estate industry continues to operate
Real estate markets are intrinsically related to employment, immigration, and the economy. While some might wait to see the result of the pandemic and hope that the prices will come down, for some people, waiting to move isn’t even an option as 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.
Lower interest rates
Real estate prices in GTA are likely to not fall unless sellers are desperate to sell now and unwilling to wait out the situation Yet, buyers can still get big savings by taking advantage of lower interest rates. As a result of the coronavirus pandemic, the Bank of Canada has announced a decrease in its benchmark interest rates putting the current rate is 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 down payment on hand, they can be in a strong position to leverage lower interest rates to make a down payment on a home.
Technology comes to rescue for Realtors
The use of technology to facilitate home buying without in-person meetings could be the new normal of the real estate industry as well. While the experience of home buying is not the same anymore, virtual open houses, Docusign, Zoom meetings & other tools have helped the buyers and realtors to do business without any problems. If this trend continues, sellers shouldn’t need to reduce the prices of their homes or take their listings off the market. This means there is still an opportunity to sell a home at the owner’s preferred price.
While the Toronto real estate market may be affected by the coronavirus pandemic, this does not necessarily mean prices will fall. The good news is that interest rates are lower, so depending on your situation; you can take advantage of these savings. The duration of social distancing measures, vaccination availability and government advisories will ultimately determine how much the market will be affected.
