Despite the crippling impact the pandemic has had on the economy, the Real Estate market in Ontario has hummed along. In fact, the activity we are witnessing in the market right now is partly reminiscent of 2017. To jog your memory, 2017 was the year of low inventory levels and frenetic bidding wars. The 2017 frenzy was quelled in the spring when the then Wynn government enacted the Fair Housing Plan, which levied a foreign buyer’s tax and strict rent control laws for Landlords.
For some time, The government’s intervention seemed to work. The trajectory at which home prices were increasing was more sustainable. However, January 2020 delivered a global pandemic from which we have still yet to recover. The effects of the pandemic on the Ontario Real Estate market have been interesting. Apart from a dip in sales activity in March and April, the Real Estate market has boasted optimal figures in terms of sales activity and price growth. Remax Escarpment’s monthly Appointment Centre report showed that for the month of July, bookings were up 35% over 2019, making it the highest number of appointments ever recorded in a single month. The Toronto Real Estate Board reported that total home sales across the GTA rose 29.5 percent from the previous year and were up 49.5 percent compared to June. The Bank of Canada has also signaled its commitment to keeping interest rates low until the economy returns to full capacity. This has prompted buyers to act with a degree of urgency to get into something in a low borrowing cost environment, before the window of opportunity slams shut. In the absence of a crystal ball, it is difficult to predict what the market will look like next year. However, with the government imposing restrictions on immigration until the virus is contained, we could see a drop off in activity until the buyer pool is replenished. This could help to keep price growth in check and avoid the unsustainable path of 2017. We will, of course, be watching the market closely to keep you informed.
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