{"id":17601,"date":"2020-03-26T14:15:01","date_gmt":"2020-03-26T18:15:01","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=17601"},"modified":"2020-03-26T14:20:41","modified_gmt":"2020-03-26T18:20:41","slug":"covid-19-real-estate-prices","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/covid-19-real-estate-prices\/","title":{"rendered":"How May COVID-19 Impact Real Estate Prices?"},"content":{"rendered":"\n

The last two weeks have ushered in a time of financial and public health uncertainty that\u2019s 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.<\/p>\n\n\n\n

While we all do our part to \u201cflatten the curve\u201d 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 \u2013 and that includes the real estate industry.<\/p>\n\n\n\n

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. <\/p>\n\n\n\n

However, while real estate brokerages and agent services have been considered \u201cessential services\u201d 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.\u00a0

The bottom line is, as long as these health risks are present, it\u2019s 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?\u00a0<\/p>\n\n\n\n

To get an idea of how COVID-19 could shape the housing market in the short- and long-term, let\u2019s take a look at a similar scenario that led to slower market conditions.\u00a0<\/p>\n\n\n\n

A Look Back at the 2008 \u2013 2009 Recession<\/h2>\n\n\n\n

Though the circumstances are very different, the closest economic event that\u2019s comparable to the impact of COVID-19 is the 2008 \u2013 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.<\/p>\n\n\n\n

According to analysis<\/g> by Zoocasa<\/a>, 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 <\/a>market, which experienced a -14% decline, from $575,400 to $497,000. Losses remained under double-digit percentages for Toronto homes for sale<\/a>, down -6% from $367,100 to $344,900. <\/p>\n\n\n\n

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 \u2013 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\u2019s searing price tag of $1,020,600, while Toronto home prices were up a whopping 135% from $359,500 to $846,100.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

What\u2019s Next for the Market? Reason for Post-COVID Optimism<\/h2>\n\n\n\n

While it\u2019s 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\u2019t change. \u201cThere has long been a lot of pent-up buyer demand in these markets, particularly due to a long-term lack of inventory,\u201d she says. \u201cCombined with continued population growth in these regions, it\u2019s 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.\u201d\u00a0<\/p>\n\n\n\n

Methodology<\/strong><\/span><\/p>\n\n\n\n

Benchmark home prices were sourced from the Canadian Real Estate Association.<\/p>\n\n\n\n

About Zoocasa<\/strong><\/em><\/p>\n\n\n\n

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.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The last two weeks have ushered in a time of financial and public health uncertainty that\u2019s 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, […]<\/p>\n","protected":false},"author":39,"featured_media":17604,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":{"subtitle":"","format":"standard","video":"","gallery":"","source_name":"","source_url":"","via_name":"","via_url":"","override":[{"single_blog_custom":"","sidebar":"","second_sidebar":"","share_position":"","share_float_style":"","post_date_format":"","post_date_format_custom":"","post_reading_time_wpm":"","zoom_button_out_step":"1","zoom_button_in_step":"1","number_popup_post":"1"}],"image_override":[{"single_post_thumbnail_size":"","single_post_gallery_size":""}],"trending_post_position":"","trending_post_label":"","sponsored_post_label":"","sponsored_post_name":"","sponsored_post_url":"","sponsored_post_logo":"","sponsored_post_desc":""},"jnews_primary_category":{"id":""},"footnotes":""},"categories":[1111,1107,33],"tags":[],"class_list":["post-17601","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-canada","category-infographics","category-real-estate-news"],"yoast_head":"\nHow May COVID-19 Impact Real Estate Prices? | Zoocasa<\/title>\n<meta name=\"description\" content=\"The last two weeks have ushered in a time of financial and public health uncertainty that\u2019s unprecedented for many Canadians. 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