The COVID-19 public health crisis was an unprecedented event, creating a great deal of confusion and a tremendous amount of uncertainty. From a surge in unemployment to a stock market crash and government-imposed lockdown measures, it was a lot to endure in such a short period. When Ontario was at the height of the virus outbreak, it was hard to predict when the market and economy would begin their return to normal conditions. But summer has arrived, and the rebound is unfolding.
Nearly every industry across the province of Ontario has endured economic pain, either temporary or persistent. The real estate industry has done an incredible job of adapting to changing market conditions, from leveraging the power of technology to adopting necessary public health protocols. The efforts of offices and Realtors have ensured that the sector held its own during and after the downturn. As a result, many cities across Ontario are reporting a significant boost in sales. One of them is London. This particular housing market is booming, and it seems not even a public health crisis could curtail its momentum.
How well is the London real estate market faring in the post-coronavirus economy? Let’s explore.
Ontario Housing Market: London Real Estate Snapshot
In London, home sales are not rebounding; they are setting records. Last month was the second-strongest June since the local real estate association began tracking data in 1978.
In June, home sales surged 13.8%, compared to the same time a year ago, according to recent data from the London and St. Thomas Association of Realtors (LSTAR). Nearly 1,200 homes changed hands. Some parts of the city experienced their best June ever, while others are either at or above recent averages.
LSTAR figures also show that average home prices advanced 17.8% year-over-year in June. Although the number of listings in June increased 3.4% year over year, June reported just 1.3 months of inventory – the lowest level in the last 10 years.
“These figures might sound incredible, with all the social distancing rules and the open house prohibition in place. But, in reality, they show how desirable the properties in our area are and how quickly our Members embraced new technologies to serve their clients,” said Blair Campbell, president of LSTAR, in a statement.
Campbell also told The London Free Press: “It’s still a tough market for buyers — great one if you are selling.”
Just how much of a seller’s market is London right now? Consider this figure: the sales-to-new listings ratio is 78.5%. London continues to be one of the hottest housing markets in both the province and in the country, and its resilience during this pandemic is evidence of that.
London: the Country’s Best-Kept Secret?
For about 30 years, the London housing market had to forge ahead without any significant momentum. In the 1980s, there was a boom in development that attracted new families in search of substantially sized homes that were not available closer to Toronto. The population grew at the time, going from 270,000 in 1987 to 383,000 today. Then something changed.
For the first time in the city’s history, the average house price surpassed the $400,000 threshold. The considerable demand, mostly from outsiders, drove up prices in this market.
London has an advantage that the major cities do not: affordable housing. Reports have repeatedly found that London is not only one of the best places to live, but it also ranks high on the affordability scale.
Although the rise in housing prices could potentially take a breather due to the Canada Mortgage and Housing Corporation’s (CMHC) new mortgage rules, London will continue to be one of the nation’s top destinations. One of the primary factors for London’s success has been its transition from a small Ontario town to a tech hub.
Overall, London has been one of Canada’s best-kept secrets for a long time, but more real estate hopefuls are beginning to discover the city as an attractive destination. London has long been considered one of the best places to raise a family due to its vast number of city parks. The economy is also faring well, with an unemployment rate that is currently lower than the national average, thanks in part to the growth of both tech giants and startups planting roots within the London city core. Many would argue that London is where the nation’s innovation and ingenuity emanates.
London was Canada’s best-kept secret, but now that the secret is out, the city needs to contend with an enormous influx of residents, as well as employees.
The Best Is Yet to Come?
The CMHC recently projected that the Canadian housing market would slump as much as 18 per cent over the next 12 to 18 months. Many have dismissed this forecast, arguing that the fundamentals are strong, and sales and pricing activity are already on the rebound. With the Bank of Canada (BoC) keeping interest rates at a historic low and the real estate industry ready to adapt to market changes, it can be hard to believe that a steep decline in sales, prices and activity is coming. London is no different, and the city is primed to continue to show strong signs of recovery as we progress through the next few hot months of summer.
Toronto real estate hits another all-time high in July – NOW Magazine
A new report suggests potential Toronto home buyers have doubled during the COVID-19 pandemic
Toronto real estate is still behaving like it’s immune to COVID-19, hitting yet another all-time high in July.
The average home price rose to $943,710, according to the Toronto Regional Real Estate Board (TRREB). That is a 16.9 per cent year-over-year increase, and 5.5 per cent higher than the previous record from last month.
The new numbers were released just as Mortgage Professionals Canada (MPC) released a report suggesting most homeowners are not worried about COVID-19’s economic impact.
“A large majority of mortgage holders do not foresee any difficulty in making ongoing mortgage payments,” says MPC chief economist Will Dunning in a statement.
Dunning’s report, Rapidly Evolving Expectations In The Housing Industry, is the first in a series from the MPC that will track whether COVID-19 erodes Canadian homeowner or buyer confidence.
“What we have seen clearly is that the vast majority of home owners are not feeling a long-term financial impact related to COVID-19, and that potential home buyers are still very much in the market for a home, signs of which are being seen in regions across the country,” he wrote.
Dunning adds that COVID-19 will have a larger effect on the rental market, as the pandemic’s economic impact is more pervasive among younger demographics and people in lower-wage occupations.
Three per cent among respondents who do not hold a mortgage were laid off permanently during the COVID-19 pandemic. That figure drops down to one per cent among homeowners .
More real estate buyers
But even non-home owners are gaining confidence, according to the MPC report; 14 per cent of respondents who don’t own a home say they will likely be purchasing in the coming year. That’s double the seven per cent of respondents who showed similar interest in a survey from 2019.
The leading motivation among those who expect to purchase a home within the next three years (whether they are already homeowners or not) is the need for space while spending more time at home.
“The increased desire to buy homes is only partially due to COVID-19,” Dunning writes in the report. “There is now more confidence that this is a good time to buy a home or condominium.”
Toronto real estate in July
The Toronto real estate market can certainly boost homeowner confidence. On top of the soaring price, sales were at a record high for July: 11,081 homes were sold, which is 29.5 per cent more than July 2019 and 49.5 per cent higher than June 2020.
“Sales activity was extremely strong for the first full month of summer,” says TRREB president Lisa Patel in a statement. “Normally we would see sales dip in July relative to June as more households take vacation, especially with children out of school. This year, however, was different with pent-up demand from the COVID-19-related lull in April and May being satisfied in the summer.”
Low-interest rates and limited listings continue to drive demand in Toronto real estate. There was a huge hike in new listings in July — 24.7 per cent more year-over-year. But the total active listings were down 16.3 per cent since last year.
The demand for detached and semi-detached properties in the 416 area is chiefly responsible for the skyrocketing average home price. Detached homes in Toronto rose 25.5 per cent to an average of $1,541,003. Semi-detached properties climbed 20 per cent to $1,181,014. The average price growth for townhouses, condos and all property types in the 905 did not exceed 14 per cent.
The COVID-19 impact
The Canada Mortgage Housing Corporation’s market outlook expects house prices to decline sharply beginning in the fall.
The CMHC spring forecast suggested that the average home price in Toronto real estate could dip as low as $825,000 in the fall. They also suggest that the average price could go as low as $739,000 in 2021 before rebounding in 2022.
Reasons for the decline include unemployment, a decline in the rental and condo market, low immigration and mortgage holders who can no longer defer payments.
According to the MPC report, 25 per cent of mortgage holders see their property as an investment. Most mortgage holders (72 per cent) feel secure about being able to pay their mortgage. Only five per cent expect to have difficulty. But according to the Canadian Bankers Association, about 16 per cent among those with mortgages in bank portfolios have opted to defer their mortgages or skip payments. That amounts to 760,000 Canadians., acc
Vancouver real estate and the Pandemic Depression | Georgia Straight Vancouver's News & Entertainment Weekly – Straight.com
The housing market is sizzling in the Lower Mainland.
There’s a great deal of talk about a V-shaped recovery.
And the media consensus is the worst economic impacts of COVID-19 are behind us.
Sure, there will be more deaths, according to this narrative. However, the prevailing view is that we should be back on our feet economically in a reasonable amount of time.
And one indication is the high volume of real-estate transactions.
The data crunchers at rennie intelligence even coined the term “Great Suppression” to describe what just happened: a government-induced slowdown to deal with a global health emergency.
But what if the story doesn’t end here?
World Bank offers bleak forecast
Two high-powered U.S. economists, Carmen Reinhart and Vincent Reinhart, recently wrote a disturbing article entitled “The Pandemic Depression: The Global Economy Will Never Be the Same”.
It appears in the September-October issue of Foreign Affairs.
In it, the Rienharts point out that the World Bank has forecast a 5.2-percent decline in global economic output in 2020.
“The pandemic has created a massive economic contraction that will be followed by a financial crisis in many parts of the globe, as nonperforming corporate loans accumulate alongside bankruptcies,” they declare. “Sovereign defaults in the developing world are also poised to spike.
“This crisis will follow a path similar to the one the last crisis took, except worse, commensurate with the scale and scope of the collapse in global economic activity. And the crisis will hit lower-income households and countries harder than their wealthier counterparts.”
Foreign Affairs is published by the Council on Foreign Relations, which has been at the heart of elite thinking in the United States dating back to the early 1920s.
Carmen Reinhart is chief economist at the World Bank. Vincent Reinhart is chief economist at Macro Strategist at Mellon.
Closed borders elevate economic threat
One of their key points is that a “rebound” should not be confused with a “recovery”. And that’s why they argue in favour of continued fiscal and monetary stimulus packages.
“Public sentiment matters to the economy, and it is hard to imagine that attitudes toward foreign travel or education abroad will rally quickly,” they note. “More generally, trust—a key lubricant for market transactions—is in short supply internationally. Many borders will be difficult to cross, and doubts about the reliability of some foreign partners will fester.”
While that’s no guarantee that this will undermine Metro Vancouver’s housing market, it could elevate the risk over the medium term, given how dependent B.C. is on tourism. Our university and K-12 school systems rely on international students to help balance their budgets.
Prime Minister Justin Trudeau has extended the federal wage subsidy for businesses until December. And going into this crisis, Canada’s debt-to-GDP ratio was far lower than where it was in the mid 1990s.
But as the Reinharts emphasize, we’re still in perilous economic waters. In fact, their piece is one of the most pessimistic that’s been published in a mainstream newspaper or magazine since April.
“Most analyses project that the U.S. unemployment rate will remain near the double-digit mark through the middle of next year,” they write. “And the Bank of England has warned that this year the United Kingdom will face its steepest decline in output since 1706. This situation is so dire that it deserves to be called a ‘depression’—a pandemic depression.
“Unfortunately, the memory of the Great Depression has prevented economists and others from using that word, as the downturn of the 1930s was wrenching in both its depth and its length in a manner not likely to be repeated,” they continue. “But the nineteenth and early twentieth centuries were filled with depressions. It seems disrespectful to the many losing their jobs and shutting their businesses to use a lesser term to describe this affliction.”
Moreover, countries that are more dependent on trade, including Canada, could face an even more uphill struggle.
“The World Trade Organization estimates that global trade is poised to fall by between 13 and 32 percent in 2020,” the two economists write in their article. “If the outcome is somewhere in the midpoint of that wide range, it will be the worst year for globalization since the early 1930s.”
It’s something to keep in mind as you watch the stratospheric rise of several U.S. and Canadian tech stocks and the seemingly insatiable desire for Vancouver housing.
'Hot' Ottawa real estate market in July as home sales increase 19 per cent – CTV Edmonton
The Ottawa Real Estate Board says residential home sales mirrored the weather in July … “Hot!”
A total of 2,189 residential properties were sold in Ottawa last month, compared with 1,838 properties sold in July, 2019.
According to the Ottawa Real Estate Board, the five-year average for residential property sales in July is 1,729.
“The resale market is not only holding its own but has surpassed 2019 figures by a significant margin,” said Deborah Burgoyne, Ottawa Real Estate Board President.
“Summer usually slows down; however, after the pandemic curtailed the spring market this year, we have rebounded well beyond expectations. It is somewhat surprising given continuing inventory shortages and the extra diligence and precautions being taken by our members and their clients to ensure everyone’s safety in the process.”
The average sale price of a residential-class property in Ottawa was $585,084 in July, a 20 per cent increase from a year ago.
The average sale price for a condo was $357,764, up 19 per cent from July 2019.
“Ottawa’s resale market offers solid returns for many sellers, while buyers continue to feel the squeeze. Those most impacted are especially those attempting to enter the housing market,” said Burgoyne.
“Multiple offers are a common occurrence with over 57 per cent of properties selling over the listing price compared to 33 per cent of transactions last July.”
Blue Jackets in tough spot after epic collapse: ‘We can’t live in the past’ – Sportsnet.ca
'Cautious consumer' to remain until COVID-19 vaccine, Indigo CEO says – Thompson Citizen
In space, bacteria is even more deadly and resilient to antibiotics – The Next Web
Silver investment demand jumped 12% in 2019 – report – MINING.com
Iran anticipates renewed protests amid social media shutdown
Richmond BBQ spot speaks out about coronavirus rumours Vancouver Is Awesome
- Media24 hours ago
Toronto restaurant blasts social media influencer customers for racist remarks
- Sports17 hours ago
Oilers 50/50 winning numbers haven’t been posted after raffle plagued by technical problems
- Tech4 hours ago
iPhone 12 display leaked
- Science20 hours ago
How to See Mars and the Moon Align This Weekend
- Sports9 hours ago
PGA Championship, Round 3: Leaderboard, tee times, TV times – pgatour.com
- News2 hours ago
Canada reports 220 Coronavirus new cases, 6 more deaths
- Sports4 hours ago
Haotong Li’s ball disappears
- Sports14 hours ago
Quick Shifts: Why Maple Leafs’ shocker could catapult to big things – Sportsnet.ca