Who ever thought you’d see the day that the City of Toronto actually experiences a decline in their real estate listings? For condo and rent prices, especially in the downtown core, Canada’s largest condo market has seen a decline due to the COVID-19 global pandemic while the suburbs saw an increase in buyers and bidding wars.
Since COVID-19 put the city on lockdown, immigration numbers have been low, the need for Airbnb has declined, and students haven’t been returning to university. This has lessened the demand for downtown short-term or even long-term housing needs, causing investors questioning whether or not it’s a good time to sell. In a recent report from Toronto Rentals, rental prices in August were down $200-$400 on average compared to this time last year. In fact, the prices reached their lowest in August since January of 2019. This doesn’t take away from the fact there is growth in certain areas though, like Etobicoke, North York and Mississauga. This could partly be because people who are working from home are looking for a place with a larger office space in their unit as opposed to the smaller downtown units that can’t accommodate that as comfortably.
Will this trend continue?
According to Urbanation, a real estate research firm, this pattern could definitely continue into 2021 and as more newly built projects become available, there could be more than 20,000 available online by the end of this year.
Another reason people are fleeing from the downtown core and condo market to the suburbs?
The Bank of Canada has slashed their interest rates to historic lows, so families are able to upgrade. They stated, “The Bank is playing an important complementary role in this effort. Its interest rate setting cushions the impact of the shocks by easing the cost of borrowing. Its efforts to maintain the functioning of the financial system are helping keep credit available to people and companies. The intent of our decision today is to support the financial system in its central role of providing credit in the economy, and to lay the foundation for the economy’s return to normalcy.”
Earlier this year, Premier Doug Ford, announced that new measures will be taken to help residents during the COVID-19 pandemic, therefore, a ban on evictions was put in place. He said he “doesn’t want Ontario residents to worry about how they’re going to pay for rent this month” and that he wants to make sure that families can stay in their homes during this difficult time without having to worry. However, this ban was lifted as of August 1. A standard eviction for non-payment can take a minimum of 75 days. What will this mean for future reports due to financial hardships and landlords evicting their non-paying tenants especially with unemployment rates hitting a record in May?
Only time will tell, especially as the economy takes its time to open back up again.
While some Toronto markets are certainly on fire amidst the pandemic, this isn’t the case for condo and rental prices and they’ll likely continue to decline until more people are able to go to work, and immigrants and university students call the downtown hub their home again.
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Written by Canadian Real Estate Wealth.
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Canadian Real Estate Wealth