The unprecedented event of the coronavirus has interfered in all spheres of our lives affecting our daily routines, habits, businesses and the economy across the whole world. Tackling the virus spread is the number one duty of every country right now, and Canada is no exception. With the government taking radical steps and urging staying at home policies, many businesses and markets took a hit, including the real estate industry. As an industry vulnerable to changing conditions, it is no surprise that we have seen a decrease in real estate market activity in times like these.

The Toronto, real estate market went from record sales in February 2020 to a significant decrease in the last two weeks of March. With social distancing rules and other precautionary measures in place (at the government and individual level), homebuyers started to refrain from home showings and sellers from letting prospective homebuyers visit their homes, which, naturally, led to a lower demand in the market. However, despite the challenging times, the market is still active, just operating at a slower pace.

The Downtown Toronto market is still active

Unlike hotels and restaurants and many other businesses that were temporarily shut down, real estate was listed as an essential service by the government, which means it is allowed to operate. One of the reasons for such a decision is the need for housing. People need places to live whether they are renting or owning. Downtown Toronto real estate and the Toronto Condo Market is no exception. If the real estate market would be halted, the domino effect that would occur from  purchase and sales and leases already under contract would be astronomical. In almost all cases, people need to close on one property in order to transition to purchasing another. The same goes for leasing and it is very vital to the city’s sustainability to keep the transition going smoothly. The Downtown Toronto condo market has been strong and flourishing for years. Toronto’s great appeal and the demand for Toronto condos definitely has the capability to sustain certain slowdowns like the one we are experiencing now.

Real estate transactions are still possible

While many Downtown Toronto condo buyers and investors have delayed their condo purchase for later and sellers decided to wait a bit longer with their listings, there are still people who were caught mid-transaction, homebuyers who really need a new home and sellers who have to sell out of necessity. So, there is still room for the market to remain active, and more importantly, homebuyers and sellers can make a move if they desire. Some buyers are taking advantage of less competition and getting into the market as in the long term real estate has always been a safe haven for investment. Many Downtown Toronto agents like myself are still working, and while we may have shifted to online meetings and virtual home tours refraining from in-person contact, we are still able to help buyers and sellers in these tough times. 

Lower mortgage rates may spur new demand

With the Bank of Canada’s announcement of mortgage rate cuts, some Downtown Toronto condo buyers whose jobs have not been affected may be encouraged to use the opportunity to buy their dream condo and get a good mortgage deal they could not get otherwise. It may also be a prime time to upgrade to a more expensive property as it can be favourable in two ways. The cost of borrowing money has decreased and affordability has risen giving buyers increased purchasing power. Secondly, as real estate values tend to move together as a percentage, if there has been a slight decrease in value of real estate, a more expensive property would have decreased in value by a larger dollar value than a less expensive unit.

The Downtown Toronto market shifting to a balanced market

The Downtown Toronto condo market has always been very competitive, and with an everlasting supply and demand imbalance, it was more often in a seller’s market than not. With the COVID-19 situation and as many buyers and sellers moving to the sidelines to wait it out, a more balanced market may be imminent.

While the future still seems uncertain at this point, the Downtown Toronto condo market, even if less active, appears to be doing fine so far and some attractively priced condos are still seeing multiple offers. I have seen some units sell for attractive prices which is enticing for buyers looking to make homeownership a reality.  Which direction the real estate market will take in the long run will depend on the time needed to tackle the virus, economic recovery plan, government measures, and the over all economical impact on people.

For more info or any questions regarding Downtown Toronto condos or real estate, make sure to contact me here.