The second phase of the province’s economic restart will look and feel a lot like the first for the real estate market according to the experts.
While the province starts getting back to work and small businesses start to reopen with new safety protocols, the real estate market, which has been operating through the pandemic, will continue to buy and sell properties with more virtual home tours, online open houses and the signing of electronic contracts.
“I don’t think we are going to see any huge change over the next few months or so, [real estate agents] will still be using technology a lot more and still use the safety protocols we have been using to show properties,” said Sandi-Jo Ayers, president of the Victoria Real Estate Board. “These days, we are doing as much as we can online with our buyers and sellers.”
Real estate was deemed an essential service early in the pandemic and continued to operate with strict safety guidelines.
That resulted in the shut down of open houses in favour of streaming house tours online and virtual open houses.
The next phase of economic reopening will not change that, though there are guidelines to allow for physical tours of properties.
With governments lifting restrictions for some businesses, there will be a change in public confidence that could translate into business, she said. “There may be more people now willing to start buying and selling. There’s lots of pent-up demand among both buyers and sellers.
“It won’t be a flood, but there could be a large trickle of business.”
That will be welcome after a tough April for real estate. There were 287 properties sold in the region in April, a 59% drop from last year’s 696 sales.
The commercial and industrial side of the business is also not expecting to see much change as Phase 2 begins.
Ty Whittaker, executive vice-president with Colliers International Victoria, said the biggest difference doing business during the pandemic has been communication. “There have been a lot more Zoom meetings taking place and a lot of different formats of communicating.”
There wasn’t much difference in the way the market worked, though property tours were conducted with safety in mind and being cautious and respectful of other people’s space.
“But I found that in dealing with business people they were a bit more pragmatic and keen to get back to normal and get people working again,” he said. “They didn’t seem to be as fearful.”
That may be reflected in the industrial side of commercial real estate, which Whittaker said remained steady in the first quarter of 2020.
Colliers’ most recent industrial report showed through the first quarter of this year vacancy remained low at 0.8% versus 0.7% in the fourth quarter of last year, and lease rates increased by an average of 15.4% since the first quarter of 2019.
Whittaker said there were only a handful of industrial tenants that asked for rent assistance from landlords through the first quarter, while a significant number of retail tenants requested help in that time.
“On the retail side of things we hear from landlords that as many as 30% of retailers may not be able to switch the lights back on,” he said.
The same is unlikely to hold true with office space. Whittaker said when nearly 50% of all office space is leased to government, there is a strong amount of stability built into the market.
Edited By Harry Miller
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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