There is no denying the impact the coronavirus (COVID-19) is having on the global economy is troubling. China, the world’s second largest economy, has the largest outbreak with over 80,000 cases reported and 3,015 deaths as of this writing and has suffered the greatest. The virus has halted production and caused major interruptions to the supply chain and economic volatility, and it could lead to an estimated $2.7 trillion in lost global output, according to Bloomberg Economics.
Watching China’s production and economy falter has people questioning how the coronavirus could impact the American real estate market.
Foreign buyers will increase, at least for a while
Considering China is the largest foreign buyer of residential real estate as of The National Association of Realtors’ (NAR) 2019 International Activity in the U.S. Residential Market, accounting for $13.4 billion of $77.9 billion, or 17.2% of the foreign market share, the coronavirus could greatly impact investor activity, but surprisingly in a positive way.
Recently, China’s foreign investment in American real estate saw a decline, which many economists attribute to the lower inventory in the U.S., the U.S.-China trade war, and the strengthening dollar.
But as confidence in their own real estate and other foreign markets falters, investors are moving their money into hard assets, like real estate, in areas like the United States, who to this point has not suffered greatly from the spread of the disease. Roofstock, a popular online marketplace for real estate investors to purchase or sell rental real estate, has seen a 450% increase in traffic from Asian countries in the past month.
Revenue and growth in CRE will slow
In the event of a full-blown outbreak here in the U.S., commercial real estate (CRE) would be the hardest hit. Production and economic activity will slow because people will likely stay indoors, lowering consumer spending. Default rates in CRE loans would increase, and production and development would decline.
A number of companies and CRE investors are trying to plan ahead by taking increased measures to reduce the spread of the virus, especially in properties that house or employ multiple people.
Bryan Murphy, CEO of global coworking and private office space provider Breather, tells me he has already implemented “an enhanced cleaning and disinfecting process following guidance from the CDC to ensure Breather’s customers are safe and healthy and reduce the potential spread of the virus.”
Companies like Amazon (NASDAQ: AMZN), Google (NASDAQ: GOOGL), Apple (NASDAQ: AAPL), and Facebook (NASDAQ: FB) are also planning to prevent the spread of the virus by asking employees to work from home. While these methods can help, CRE investors should have a contingency plan to fall back on in case the virus isn’t contained as intended.
Shaky ground gets shakier
The global market and American economy was already on shaky ground prior to the coronavirus outbreak. I previously wrote about a number of signs in our economy that indicate a possible recession in 2020. Those indicators have only been perpetuated as investors’ fears about the spread of the coronavirus and impact on the global market grow.
It’s obvious Congress and the Federal Reserve are concerned about the strength of our economy. Lowered interest rates will only help for so long. While this may boost borrowing and deployment of capital in the short term, it’s unlikely a fix that will counteract the impact of the virus in the long term.
The market will remain relatively unchanged for now
As of today, Saturday, March 7, there are more than 300 cases of the coronavirus reported in the United States, according to the New York Times. While this number is still relatively low in relation to the 327 million people who live in the United States, it is spreading quickly.
For the time being, it’s likely markets will remain volatile with the residential market remaining mostly unchanged for now. Investors can take advantage of lowered interest rates and minimal impact on the U.S. economy up and to this point. If the outbreak continues to grow, it’s unlikely our economy or residential real estate market will be able to withstand the impact.
The depth of impact depends on how widespread the virus gets
Unfortunately, only time will tell how the coronavirus will impact the real estate market. There is no doubt the coronavirus will impact the American economy and real estate market in some form, but no one truly knows to what extent.
Many real estate markets in the United States have rebounded and recovered from the 2008 recession, but there is a large chance that the continued spread of the coronavirus could be the tipping point, putting the U.S. economy into a full-blown recession.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
