The Covid-19 pandemic has undoubtedly caused significant economic headwinds. However, Covid has been no match for the housing sector. Earlier this year, the CMHC (Canada Mortgage Housing Corporation) forecasted a 9-18% decline in the fall 2020 market. Evidently, this didn’t happen. In fact, despite the prophecies of disaster, the market has bustled along and posted significant gains over last year in both sales and price growth. The consistent demand for housing is due to the low borrowing rates. Buyers are locking in at favorable rates and are clamoring to find a house before the window of opportunity slams shut.
After a challenging year -to put it mildly- the gains in the housing sector is welcome news. However, it’s important to note that not all markets have enjoyed equal growth. The Toronto condo market has experienced several months of decline- the only housing category to see a drop in sales. This is due to the fact that buyers have been shifting their priorities. Pre-covid, young professionals working downtown prioritized living closer to work to avoid enduring a long commute. However, companies have been urging their staff to work remotely to avoid the spread of Covid. Industries have also recognized the efficiency of staff working from home, both in cost and productivity. Therefore, the work-from-home routine could be here to stay, leading buyers to shift their priorities to more generous square footage at more affordable prices in the suburbs.
Despite the good-news story about the housing sector, some market watchers predict a softening in the market. They have based this forecast on a growing cohort of buyers who are struggling to move up the property ladder, as they are relying on the sale of their condos to come up with the downpayment. “The cracks appearing in the condo market may well become the fault-line in Canada’s housing market” wrote Nichola Saminather and Julie Gordon with Reuters. We do not anticipate this to have a severe impact on the market, as most of the buyers we have been fortunate to relocate from Toronto to the suburbs have been renting to save up their downpayment. As long as there continues to be a healthy crop of buyers and low supply levels, we are confident this upward trend in the market will continue into next year.
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