Though the Canadian real estate market witnessed a relative pause in March, home selling and buying activities have continued. This comeback was with drastic changes, however. The necessity to practice social distancing has greatly affected Canadians’ everyday life since the global crisis. Both home sellers and buyers are grappling with social distancing measures imposed to minimize close human contact. The restrictions on real estate sales activities have impacted the housing market in recent months. This article reviewed the main shifts in the Canadian real estate market caused by the outbreak of Covid-19.
Canadian Real Estate Market amid Covid-19
New Marketing Trends
A typical process of house selling involves a great number of in-person meetings and face-to-face interactions. The way real estate agents do business with their clients, however, has inevitably changed in response to the current situation. Social distancing guidelines strictly emphasize maintaining social distancing to keep the real estate transactions as safe as possible for all those involved in the process.
Canadian real estate councils and boards strongly urged their members to cease open houses. As a result, real estate agents turned to innovative technologies to advertise their listings like virtual 360° home tours and live open house tours that allow buyers not only to view the properties remotely but also to ask their questions about the house features.
Despite all the advantages that using creative real estate marketing tools has, some buyers still insist on viewing the property in person before signing the contract. to keep their clients satisfied, Canadian real estate agents developed and agreed on guiding principles through which only serious buyers who are truly in need are allowed to view the properties in person. On the strength of the said principles, buyers must use their vehicle to arrive at the property, only the agents are allowed to touch, for example, light switches or door handles, elevators shall not be used unless it is necessary, and hand sanitizers must be available in the place.
Recession in the Housing Market
The safety issues as well as uncertainty about the future of the Canadian real estate market caused many sellers and buyers to pull out of the market entirely, hoping that the pandemic would gain momentum. This resulted in a significant drop in real estate sales activities in March compared to the last year. In the first half of March, however, sales activities were in fact up because desperate buyers rushed into making purchases while they could.
Most real estate experts are confident that the impact of social distancing on the Canadian real estate market is temporary. The restrictions on real estate sales activities are gradually lifted all across the country and the market is adjusting to the ‘new normal’. Therefore, the Canadian real estate market is expected to bounce back to its previous condition again.
Besides, house buying and selling is an inevitable practice. Although the housing market is still depressed, the demand outside is picking up. This pent-up demand will itself fuel real estate sales activity across the country. It is predicted that by early 2021, house sales will have already returned to a baseline of 85,000-unit annual pace.
As the world is being recovered from the shock of the Covid-19 outbreak, the signs of a gradual rebound can be seen in some regions of the country. Across Ontario, for example, the signs of improvement have already risen to the surface since the third week of April. Moreover, there was a 25% improvement in showing activities in the province by the end of March. Despite the initial recession in March and April, the Canadian real estate market has witnessed a 15% growth in the average selling price and a 30% increase in the number of sales.
However, the Covid-19 pandemic is still likely to impact the real estate market. House sales and prices are expected not to start recovering until mid-2021. In addition, sales and prices are still likely to remain below their pre-pandemic level by late 2022.
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