COVID-19 Impacts On The Toronto Real Estate Market
Are you finding it hard to sort out what’s actually important in the news and what that means for the real estate market? To help you out, we’ve planned out scenarios along with a recommended action plan specifically for real estate. By getting prepared, you’ll be able to act quickly so you can better grow your real estate portfolio.
COVID-19: A Timeline
We’ve mapped out what’s happened, so that you can review the key facts, what’s still unknown, and the resulting effects on the stock markets. Here’s what we know so far.
End Of February 2020
S&P 500 dropped 13% due to an expected slowdown in China’s economy with trickling effects worldwide.
Mid March 2020.
S&P 500 dropped a further 20% due to an expected global slowdown.
End OfMarch 2020
S&P 500 rose 8% due to favourable government stimulus worldwide and lockdown measures.
April 2020 Onwards
What direction are new COVID-19 cases headed?
How will this impact the Toronto real estate market?
TORONTO REAL ESTATE: KEY LEADING INDICATORS
Leading indicators are factors that change before the general market begins to go in a particular direction. In the real estate market, buyer and seller interest in properties move before actual prices. It’s also worth noting that buyer interest moves a bit quicker than sellers since it’s easier to start shopping than seriously getting a property ready for sale. Here’s what you should watch out for.
The number of listings are reduced when sellers postpone, suspend, or delist properties for sale. When the COVID-19 situation improves, listings should slowly go up.
The frequency of showings indicates the level of buyer interest in the market.
Days On Market (DOM)
DOM goes up when there’s less buyer interest. As the COVID-19 situation improves, DOM will also be reduced.
Toronto Real Estate: Scenarios & Action Plan
Although we don’t know what exactly will happen in the future, we can map out unknowns. Based on the expected effects on the real estate market, we can work out an action plan. This allows us to get better prepared and take quicker action when it’s the right time to do so. When COVID-19 starts to recover, here are the key scenarios and outcomes to expect.
How Can We Help?
If you are serious about growing your real estate portfolio, it’s time to get ready because great opportunities won’t last long! Take this time to stress-test your own cash flows and make sure you have enough emergency funds in case something changes. Then, line up your mortgage pre-approvals so that you can take action quickly.
If you want to understand more about the current real estate situation in Toronto, need help securing a great mortgage, or want us to keep you in the loop with great investment opportunities, feel free to reach out!