Headlines around the country speculate on the potential impact of COVID- 19 on the real estate market. Some are calling for an outright crash due to record unemployment rates. Some are saying that when all this dies down, we’ll just go back to where we left off with strong housing prices in Guelph. Who’s right? Who’s wrong? And most important, what is really happening out there in the Guelph real estate market?
Last month, Beth and Ryan Waller reported that COVID-19’s impact on Guelph real estate prices sent the number of houses sold plunging 70%. It made sense in retrospect: Guelphites were following the rules and self-isolating. They weren’t looking at homes to buy and if they didn’t need to sell, they didn’t sell. But as the Ontario government begins to cautiously ease up on restrictions, it appears that buyers, sellers and Realtors have cautiously embraced a new real estate market.
The City of Guelph has realized 5 consecutive weeks of increasing sales, while the average price in the past two weeks has been back at levels realized pre-COVID. It appears on the surface that, for now, we are slowly recovering. However, in times like this, there are some interesting trends that emerge to show just how dynamic the market can be.
Many people speculated that sellers would panic and put their houses on the market as soon as reasonably possible, which would flood the market with homes and cause a decline in prices. In fact, the overall number of houses available has been declining over the past few weeks. Buyers are buying faster than sellers can get houses on the market. Although still early, there are a few interesting trends that have emerged.
Despite a rough 8 weeks, the average price of a home in Guelph has still increased by almost 11% in 2020. However, the market share of condo sales in Guelph has been declining each month this year in both dollars sold and the number of units sold.
Condos now represent only 18% and 25% market share respectively. This is mainly due to two factors: buyers have been snapping up freehold homes at a faster rate, as well as fewer condo developments offering new units for sale. Sure, the average price of a condo is increasing, but not at the same rate as freehold homes. If you are considering a condo purchase or sale, it’s recommended to ask your REALTOR® to watch this segment closely for you as it appears to be changing quickly.
And although the average price of a home in Guelph has increased 11% this year, there are some neighbourhoods that are really propping up this number. If you own a home in the area of Kortright East of Gordon St, you’re leading the way at a +43% increase in average price. Looking a bit deeper though, this is mainly due to new higher-end development but still plays an important role in the total Guelph growth. Other notable average priced neighbourhood gains include Victoria North (+18%), Riverside Park (+17%), Kortright West (+15%) and Village by the Arboretum (+13%). The only decline in average price year to date is the General Hospital area at -1.3%, but due to generally low sales volume, this may be just an issue of timing.
Lastly, we’ve seen the price bracket of $500- $600,000 rebound quickest in Guelph. Over the past few weeks, this segment has represented over 40% of the sales within Guelph. At the same time, new listings in this price bracket haven’t increased which means that if you’re a seller and were considering selling, now may be the time.
With the re-opening of retail and other businesses, real estate in Guelph is slowly starting to improve toward seasonal levels. Buyers may not be able to attend open houses yet, but there are still a variety of online and virtual tools that could be used online before viewing a home in person. Viewing homes with a REALTOR® is available to serious buyers, but strict safety precautions are to be taken to ensure the safety of both buyers and sellers.
Beth and Ryan Waller are Guelph Real Estate Agents with Home Group Realty and have been writing for Guelph Today since June 2018. If you have questions on the Guelph estate market, feel free to email them at firstname.lastname@example.org, visit bethandryan.ca or call 519-546-3390.
Source: GDAR data, 2018-2020. $ volume and unit sales, City of Guelph.
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Despite the challenges, Edmonton area real estate values 'have held up extraordinarily well' – Edmonton Journal
I have to say the Edmonton area real estate market has surprised me.
When you consider the onslaught we have had in the past five years — oil price crash, more than 100,000 job losses, fires, floods, domestic and international trade disputes and then COVID-19, I would say the Edmonton and area real estate values have held up extraordinarily well.
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Since 2014, we’ve only seen modest declines in prices, with single family homes declining the least. Edmonton remains Canada’s most affordable major city with one of the highest average incomes.
Other Canadian cities have seen significant price gains in the same time period creating a bigger difference in real estate values between regions. We have had clients who can work anywhere and chose Edmonton as they can afford much nicer living quarters here for the same money.
Given the lower prices and interest rates combined with rising rental demand, it is easier for investors to get positive cash flows. We are seeing investors looking at condos for their positive cash flow. This fact will help to support our real estate values.
Toronto and Vancouver Real Estate Inventory May Get A Boost From AirBNB Slowdown – Better Dwelling
Canadian real estate markets may be getting another inventory headwind soon. National Bank of Canada (NBC) research estimates AirBNB hosts may contribute to oversupply later this year. As the slowdown impacts hosts, many may be incentivized to sell. By their estimates, just a quarter of hosts selling would cause inventory in cities like Toronto and Vancouver to swell.
AirBNB and Housing Inventory
AirBNB helps homeowners take existing housing stock and convert it to short-term rentals. Rather than staying in hotels, travelers can now stay in existing non-hotel stock. At first, it wasn’t a big issue when just a few people were doing it. As the platform expanded, people began buying additional housing just to operate short-term rentals. By repurposing housing that would otherwise be long-term units, cities now need additional housing. Basically, short-term rentals lead to an inventory squeeze, pushing rents and prices higher. Temporarily at least, for as long as the squeeze persists. That squeeze could end as quickly as travel did.
The Travel Industry Expects A Big Slowdown
The travel industry doesn’t expect travel to recover quickly from the pandemic. The US has approved some routes cutting plane traffic up to 90% until September. The IATA, the trade association for international airlines, also doesn’t see traffic returning to 2019 levels until at least 2023 – at the earliest. What does this mean? Fewer users of short-term rentals, and more competition from hotels for those travelers. All of this can have a big impact on real estate inventory, according to NBC numbers.
Canada’s Biggest Real Estate Markets May See Inventory Spike
If just a quarter of AirBNB inventory is sold off, NBC sees a lot more real estate listings on the market. In Vancouver, the bank estimates real estate listings would rise 12%. Montreal would see an increase of 27% in resale listings. Toronto is another story though, with inventory forecasted to rise a whopping 34%. That’s with just 25% of AirBNB exiting as hosts.
AirBNB Boost To Canadian Real Estate Inventory
The potential increase in real estate listings if 25% of AirBNB properties were listed for sale.
Source: National Bank of Canada, Better Dwelling.
The boost is another headwind for inventory rising later in the year. Inventory was already expected to rise in the coming few months. NBC economists believe this would be “exacerbating oversupply in the coming months.”
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How Is The Real Estate Market In Muskoka Post COVID19 – Hunters Bay Radio
In a brand new video podcast series, Gerry Lantaigne with Sutton Group – Muskoka Realty discuses the world of real estate in Muskoka during the Coronavirus pandemic.
Join Gerry every month as he updates you on The State of Real Estate
Watch the inaugural episode here:
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