Housing in the GTA and southern Ontario is holding steady despite all of the pressure that the outbreak of COVID-19 is unleashing on our society.
Hundreds of thousands of Canadians have taken advantage of the mortgage deferral programs being offered by the big Canadian banks. Many homeowners are also refinancing their mortgages to reduce their payments, save money, and take full advantage of the lowered interest rates. With this mortgage deferral program, Canadians will have 6 months of breathing room to manage their finances and continue preparing. Those who have lost their jobs have taken wage subsidies and enhanced EI to help them manage finances and prepare for longer term mortgage responsibilities.
It is still far too early to get a clear picture in the immediate and medium term impacts to housing supply, prices, and demand. What is clear is that listing growth is slowing and showings are drying up as people are naturally reluctant to showcase their homes and put them on the market at a time when they are unlikely to sell or have limited interactions with realtors. Prospective buyers with cash and ongoing stability to their incomes see this window in time as a strong opportunity to buy, and are making offers or waiting for listings to increase. There has long been a well known pool of prospective buyers waiting for an opportune moment to buy housing. Stats also show that the number of wealthy buyers is increasing rapidly. With the equity markets having dropped so significantly, people are turning to real estate as a stability investment outlet.
No one expects rates to go up, instead, they will remain low until the economy recovers. The big question is what will happen if the economy remains burdened and mortgage deferral options dry up. Most banks project long term economic dislocation until 2021. For now, southern Ontario real estate is stable but long term impacts could begin to destabilize demand and prices.