The COVID-19 pandemic took the world by surprise and showed us how unprepared we were for events of this caliber. As a result, many markets went crashing, jobs were lost, businesses were closed, and we faced a new reality. We will have to live with this until a vaccine or an effective treatment is invented.
In the meantime, for many businesses, it is adapt or close. The real estate industry in Canada took a big hit. But in all honesty, not all regions and not all segments of the real estate industry were affected evenly.
In the following lines, we will explain what happened to the condo market in Toronto and its greater area. We draw our analyses and conclusions from companies such as CondoMapper that managed to stay afloat throughout the pandemic and adapted to the new circumstances.
Here are the top seven lessons.
1. It is a very volatile market
In March and April, it seemed that the condo market is crashing with the speed of light. Three weeks later, things didn’t look so gloomy. Fast forward, two and a half months later, and we see that not all is lost. The demand is far from it was, but it is in line with the supply.
2. It is a fluid market
The demand during June is less than half of what it was in June 2019. The supply of new units quickly adjusted to the new circumstances. Nowadays, they seem perfectly tuned, which is almost incredible how that happened so fast. Therefore, even a much smaller market, it seems that everything else is in harmony. Even the prices are as predicted before the coronavirus pandemic.
3. In-migration is the key to recovery
Almost 100k people come to live in Toronto each year. Those are people from both other regions in Canada, as well as other countries. That’s a massive influx of people that stopped when the pandemic struck.
Once the in-migration returns to its normal or at least to some percentage, it is fair to expect that the condo market will show strong signs of revival.
4. The low-interest rates were welcomed
The entire real estate industry got a massive boost when the new below 2% rates were introduced. The results are even more evident during June when sales increased for several percentages.
5. The unemployment rate wasn’t that essential for the condo market
That’s true for the most part because most of the lost jobs were low-paying jobs. That means many people that lost their jobs were not on the market for a new condo or a new house. So in that regard, the condo market wasn’t hit that bad.
6. Condo prices didn’t go down
Even though many predicted that prices would crash, that didn’t happen. Instead, we saw a self-regulated market whose demand and supply was, and still are synchronized. From the look of things, it is not likely that a massive drop in prices is coming any time soon.
7. People accept the new reality as it is
Whether there will be an effective vaccine any time soon or not, most people accept the new reality. They are over the initial shock and are now looking forward to living their lives while minding all the health protocols and recommendations.
As a direct result of that, we see an increase in sales month by month, especially during the summer months. Everyone expects that trend to continue. In case an effective vaccine is introduced any time soon, that will be another major boost for the condo market in Toronto, as well as the rest of the country.