While the beginning of the COVID-19 outbreak feels as if it was years ago, life post-pandemic seems even further away.
In just a few months, we’ve already seen over 65,000 confirmed cases from coast to coast and nearly 4,500 deaths. In response, all levels of government have taken an ‘all hands on deck’ approach to curb the spread of the virus by implementing stay-at-home orders, banning large social gatherings, and enforcing all non-essential businesses to close.
However, this is has led to many industries coming to a standstill, prompting more than three million Canadians to lose their jobs just between February and the end of April, while millions of other residents have seen their incomes or hours reduced significantly.
Where we’ll all be at the end of this is a daunting thought, as every aspect of life feels uncertain right now. From a real estate standpoint, could we see the market crash? Some experts say that’s unlikely, but the rising unemployment rate, combined with the slowing economy are definitely causes for concern.
But what is reassuring is that some provinces are starting to ease back into a sense of normalcy by allowing select businesses to reopen as health officials report improving case numbers, indicating that perhaps the end of the lockdown could come sooner rather than later.
Things are also starting to look up in the real estate market, as people are finally starting to search for rentals again, according to Matt Danison, CEO of Rentals.ca.
“Rentals.ca has experienced its all-time high in traffic numbers in the first week of May surging 59% compared to the first week of April,” Danison said. “Renters who put off moving when the pandemic hit are now starting to resume their apartment search in the hopes that Canada’s lockdown will end in the coming weeks.”
Guy Tsror, a data scientist at Local Logic in Montreal agrees. “At its worst point since COVID-19, the rental market lost 27% of user search traffic across Canada. But since that low point in mid-March, the market has rebounded with the search traffic for the last two weeks of April exceeding the last two weeks of January.
“People still need homes, and we see that the initial shock of COVID-19 has subsided, and consumers are back out there looking for homes online,” he added.
As for where the real estate market is heading, Rentals.ca put together a report that maps out seven possible predictions — digital and otherwise — that might stick long after the coronavirus is gone and reshape both the housing and rental market. While it looks like virtual tours are here to stay, changes could be coming to short-term rentals and how apartment buildings are cleaned, while co-working spaces in apartment complexes could start to increase in popularity, according to Rentals.ca’s predictions.
But what is interesting to note is that Rentals.ca predicts that rents in Canada could fall in the short term. And while this does sound great in theory, it could also lead to affordable housing becoming harder to find.
As a result of COVID, Canada is seeing less immigration, fewer international students, and with the border now closed, there won’t be nearly as many seasonal and part-time workers, who are all typically renters. This coupled with Rentals.ca’s prediction that some short-term rentals convert to long-term rentals, could lead to rents declining.
“With fewer renters and more supply, rents could slide down overall this year, but the higher end of the rental market advertised as luxury rentals could be more affected,” reads the report.
The problem with this possible outcome, though, is that affordable housing already os already hard to come by, especially in big cities, and lower rents could lead to affordable housing tightening up, even more, suggests the report.
“With the record number of layoffs, there will be more demand than ever for affordable housing,” said Rentals.ca’s Danison.
Not to mention in some areas, building affordable housing has slowed or even been halted due to the pandemic. Danison says Toronto would especially struggle with affordable housing, which was already labelled as a crisis even before the virus.
What ultimately ends up happening is hard to say right now, because it all boils down to how long the pandemic lasts — which still remains a looming question mark.