Zoocasa
Sold Prices
Mortgage Calculator
Map
Market Insights
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Zoocasa
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Home Canada

How May COVID-19 Impact Real Estate Prices?

Penelope Graham by Penelope Graham
March 26, 2020
in Canada, Infographics, Real Estate News
Reading Time: 4 mins read
Share189
Tweet
Share
189 Shares

The last two weeks have ushered in a time of financial and public health uncertainty that’s unprecedented for many Canadians. As governments enact measures to keep the public safe from COVID-19 community spread, with the closing of schools, small businesses, and other non-essential services, many are questioning what the economic impact will be for all, from individuals to entire industries.

While we all do our part to “flatten the curve” by working remotely if possible, avoiding gathering in public, and going out only on a need-to basis, businesses that require an in-person approach are having to make drastic changes to continue to operate – and that includes the real estate industry.

The home buying and selling process typically requires a personal connection between real estate agents and their clients; from the first in-person meeting to discuss their needs, to the viewing of open houses and delivery of deposit funds, real estate transactions are typically hands on. 

However, while real estate brokerages and agent services have been considered “essential services” in some provinces including Ontario, the strong recommendation from municipal and provincial real estate bodies is to stop operations altogether in order to comply with best social distancing practices. This comes after a call last week to cancel all open houses, and make all showings virtual, to be conducted on an only as-needed basis. As well, it has been strongly discouraged to show homes that are currently tenanted. 

The bottom line is, as long as these health risks are present, it’s widely expected that anyone without an urgent need to buy or sell a home will put their real estate ambitions on hold for the time being. That bodes a lot of questions for the market in general; what will be the immediate impact? When the threat of COVID-19 dissipates, will prospective home buyers still be there to pick the market back up? 

To get an idea of how COVID-19 could shape the housing market in the short- and long-term, let’s take a look at a similar scenario that led to slower market conditions. 

A Look Back at the 2008 – 2009 Recession

Though the circumstances are very different, the closest economic event that’s comparable to the impact of COVID-19 is the 2008 – 2009 global recession, which was spurred by mass defaults in mortgage debt and resulted in similar monetary policy moves from central banks to mitigate the damage, along with bank bailouts and stock market upheaval. While Canada has been lauded for fiscally weathering that recession better than many nations, home prices did see a drop during its deepest crevice, between the springs of 2008 and 2009.

According to analysis by Zoocasa, benchmark real estate prices dipped across the nation during this time period by -8%, from $370,900 to $341,700. The drop was most pronounced in the Greater Vancouver real estate market, which experienced a -14% decline, from $575,400 to $497,000. Losses remained under double-digit percentages for Toronto homes for sale, down -6% from $367,100 to $344,900. 

However, as anyone who has been witness to the Canadian housing market over the last decade can attest, these losses were largely contained to the period of economic downturn, with enormous growth seen between January 2008 – February 2020. Canada-wide, home values have surged 75%, from $362,300 to $634,300, while gains were even more pronounced in the largest urban centres. Vancouver home prices rose 82% from $560,500 to today’s searing price tag of $1,020,600, while Toronto home prices were up a whopping 135% from $359,500 to $846,100.

What’s Next for the Market? Reason for Post-COVID Optimism

While it’s impossible to predict just how long COVID-19 will impact the economy, Lauren Haw, Zoocasa’s CEO and Broker of Record, points out that the fundamentals of the housing market, especially in large cities such as Toronto and Vancouver, generally don’t change. “There has long been a lot of pent-up buyer demand in these markets, particularly due to a long-term lack of inventory,” she says. “Combined with continued population growth in these regions, it’s expected that the market will experience a strong bounce back once the health risks have subsided, and buyers return to the market with restored purchasing power.” 

Methodology

Benchmark home prices were sourced from the Canadian Real Estate Association.

About Zoocasa

Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.

Previous Post

Is It a Good Idea to Pay Cash for a Condo?

Next Post

Bank of Canada Cuts Rate to 0.25% In Emergency COVID-19 Measure

Penelope Graham

Penelope Graham

Penelope Graham is the Managing Editor at Zoocasa, and has over a decade of experience covering real estate, mortgage, and personal finance topics. Her commentary on the housing market is frequently featured on both national and local media outlets including BNN Bloomberg, CBC, The Toronto Star, National Post, and The Huffington Post. When not keeping an eye on Toronto's hot housing market, she can be found brunching in one of the city's many vibrant neighbourhoods, travelling abroad, or in the dance studio.

Related Posts

Calgary city square in springtime
Canada

Canada’s Market Hints at a Mid-Year Revival for 2025: CREA

June 16, 2025
Dad and daughter walking dog
Canada

Canadian Cities With the Sharpest Home Price Declines in Spring 2025

June 16, 2025
Canada

5 Canadian Cottage Regions That Make the Perfect U.S. Buyer Getaway 

June 15, 2025

Blog Search

No Result
View All Result

Newsletter Sign-up

Join a community of 130,000+ subscribers. Don't miss important real estate news, market data, and buying and selling tips.

Recent Articles

A woman seated on the floor with a fan beside her.

6 Easy Ways to Beat the Heat Without Cranking the AC

June 19, 2025
A woman looking happy while watching TV on a sofa

Can Homer Simpson Buy a House in 2025? Here’s How 100 Legendary TV Characters Would Do

June 18, 2025
fake spider in purple background

Ants, Spiders, and Gnats—Oh My! 5 Simple Pest Solutions

June 17, 2025
Calgary city square in springtime

Canada’s Market Hints at a Mid-Year Revival for 2025: CREA

June 16, 2025

Featured Listings

5 Canadian Cottage Regions That Make the Perfect U.S. Buyer Getaway 

June 15, 2025

From Skyline Views to Private Escapes: 5 Luxe Calgary Homes for Sale

June 10, 2025

What it Means When a Home is Listed for $1

June 7, 2025

6 Can’t-Miss Victorian Homes for Sale in San Francisco Right Now

June 2, 2025
first-time home buyer programs and rebates

Social Media

250 The Esplanade Suite 408 Toronto, ON M5A 4J5

Stay Connected

  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
No Result
View All Result

Zoocasa © 2007–2022. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.