/arc-anglerfish-tgam-prod-tgam.s3.amazonaws.com/public/DHQCORTBABFVRDV6LDBX24MCLE.jpg)
A real-estate sign stands in front of a west-end Toronto home on March 7, 2020.
Graeme Roy/The Canadian Press
Real estate activity is humming in Southern Ontario and Montreal but starting to slow in other Canadian cities as major industries shutter and slash jobs due to the novel coronavirus pandemic.
In Toronto, where sales have been soaring for the past 12 months, properties continue to receive multiple offers and more than their asking price.
In other Ontario cities such as Oshawa, Windsor and Kitchener, realtors are reporting high levels of activity. A detached house in Kitchener received 53 offers and sold for $491,000. The asking price was $299,900.
“So far, we have not seen anything that makes us think that we are going to have a drastic shift in activity,” said Christopher Alexander, Re/Max’s regional director for Ontario and Eastern Canada. “There is a still a big housing shortage across the country, and interest rates are rock, rock bottom.”
It’s a similar story in Montreal, where the market has been booming for the past two years.
“We put a property to market and got three offers,” said Amy Assaad, a realtor with Royal LePage Heritage. “We are still getting calls.”
However, that interest may change in coming days with the economy grinding to a halt as entire industries fail, from tourism and recreation to manufacturing and accommodation.
The country’s largest real estate brokerages, Royal LePage and Re/Max, along with the Real Estate Board of Greater Vancouver, have urged their members not to hold open houses.
Federal and local governments have stopped all non-essential activity, canceled school and restricted large gatherings. Ottawa has urged people to stay at home but has stopped short of ordering a general quarantine.
“There’s still a lot of reluctance to cancel or suspend completely,” said Sarah Richardson, a sales rep with Royal LePage Urban Realty in Toronto. “One client wants to sell and get the best price they can even if it means having many people through their home for showings, and the other wants to limit showings as much as possible and is intending to suspend their listing after this weekend if we’re unable to sell.”
A slowdown is beginning in other major cities that were either booming or recovering from stricter mortgage rules that went into effect in 2016 and 2018.
In Vancouver and Victoria, realtors say there are still some multiple offers, but calls are drying up. One Vancouver realtor said activity was bumpy, with one property drawing many viewers, while others “were like ghost towns.”
Mike Stewart of Oakwyn Realty Downtown Ltd. put it this way: “We have cancelled all our open houses, and it is dead as a door nail out there.”
In Ottawa, another city that has seen a jump in sales and double-digit price increases, some realtors said no one is calling.
“Everyone is in panic mode. We get a lot of calls, and it just stopped completely,” said David Haynes, a realtor with Royal LePage Team Realty in Ottawa.
The euphoria from the Bank of Canada’s interest-rate cut of 50 basis points on March 4 was cut short when the risk of becoming infected by the virus increased and the news turned more dire.
The central bank’s second cut of 50 basis points, to 0.75 per cent last week, did not trigger lenders to drop fixed mortgage interest rates as they would typically do. Scotiabank, MCAP, National Bank of Canada and other lenders raised some of their fixed mortgage rates, brokers said.
“It is a riskier time to be a mortgage lender when the employment situation is precarious,” said James Laird, president of CanWise Financial, a mortgage brokerage with operations in most of the country. “If they are going to lend more money, they want a higher profit margin to account for potential losses that might be happening.”
