The real estate market in Canada since the arrival of COVID-19 has reacted differently. This is similar to many other sectors where the effects have been evident. Divided into two periods are the effects of COVID-19 on the real estate. The divisions are into long-term effects and short-term effects of the period affected by COVID-19. Talking into a broader context, this global pandemic will be changing the real estate sector in Canada. This is for at least a short term interval.

Evidently in all provinces in Canada, the effects of COVID-19 have affected the corporate world with business shutdowns. Hence, resulting in most people working from home. The increase in remote working operations is not the only answer though. There has been social distancing in public places and following other mandatory measures. All these are precautions associated with COVID-19. The question arises of how it has affected the Real Estate markets in Canada.

The trends of the past few months have shown signs in the real estate sector. Ironically, due to limitations in budget real estate prices have considerably fluctuated up and down with larger intensities. The term ‘Business as Usual’ is highly affected as usually what happens has been impacted due to change in circumstances. These change in circumstances has risen due to the impacts of COVID-19 virtually on the whole business community. As it is highly unclear in this pandemic situation that how the market will behave. The brokerages and real estate agents have started to operate differently with ambiguity on how the markets shall be performing.

SHORT-TERM EFFECTS ON THE CANADIAN REAL ESTATE:

As of March 11th, WHO or World Health Organisation made a declaration. Hence, the declaration clearly stated COVID-19 being a global pandemic. At the same time stats were released from Canadian Real Estate Association, i.e. CREA. Stats showed month of February was particularly hot for year-over-year sales that rose 27% nationwide. Also, an indication of the fact that the busy spring buying season had started early. Also, performances showed incredible results for both Toronto and Vancouver i.e. 45.6% and 44.9% rise in sales transactions for the cities.

Despite all the post-pandemic results variances, we can also expect to see market activity slow down in the sector. Hence, buyers and sellers may reach a stalemate. Sellers will show hesitancy in accepting lower offers while the buyers on the other hand will hold off their home purchase. This is all amid uncertain health and economic conditions rising due to the results of COVID-19. Although these can be termed as short term effects of the pandemic. However, these can be influence generators for long term effects at the same time. The effects of the pandemic can be balanced concurrently as there are some buyers and sellers in the real estate sector who can’t avoid their buying or selling.

There are still those who need to sell and buy right now that is for the sake of relocation for work, or those who have already sold their home pre-pandemic and are looking for another home. Even due to the effects of COVID-19, some buyers and sellers can’t change their decisions. These are known as “Highly Motivated” buyers and sellers. This is mainly as their life is already under the influence of personal circumstances for e.g.: Divorce, relocation due to work, or downsizing or up-sizing quickly.

LONG TERM EFFECTS ON THE CANADIAN REAL ESTATE:

What’s harder to predict is how COVID-19 will continue to be a threat i.e. along with its impacts on individuals, businesses, and the real estate sector. It’s hard to predict because COVID-19 is still not over yet. Most importantly, how COVID-19 has changed the circumstances is a huge question mark itself.

As an example, the case study of the Ontario real estate market is the best answer. While the circumstances are wildly different, the last time the market saw a change was in the spring of 2017. The effects of that cool down in the sector lasted into the second half of 2019 which means at least two years period. However, the effects of the two year period means higher effects of pandemic COVID-19. Since it started in March 2020 and the markets are still under the negative influence of the pandemic.

However, the reality states that the fundamentals of the market i.e. particularly in the GTA and other major urban centers don’t change. Also due to the limited inventory available and also combined with the growth of the population in Ontario’s big cities like Toronto, we can expect a quick recovery. Once the financial markets get into stability from the effects of COVID-19. Similarly, recovery can be much expected once the health risks are mitigated. Bringing stability to the sector after COVID-19 is itself a high necessity.