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MONTREAL ― The COVID-19 economic crisis has shuttered our cinemas and airlines, thrown restaurants and bars into disarray and is currently busy running up a heck of a government deficit.

But apparently it can’t derail Canada’s housing markets, many of which can expect to see rapid house price growth once the outbreak passes, several recent forecasts have predicted.

Despite a steep drop in sales this year, the average home price in Canada will be 6.1 per cent higher at the end of this year than it was a year earlier, TD Bank said in a forecast issued this week.

Given that incomes are unlikely to rise much during this crisis, “affordability will deteriorate when you look at house prices,” the report’s author, economist Rishi Sondhi, conceded.

Sales may be falling, but the supply of homes on the market is falling with them, Sondhi said, which means the market balance isn’t shifting much.

Many people are hesitant to put their house on the market ― either because of concerns about the virus, or concerns about the health of the market.

“Sellers are moving to the sidelines just as rapidly as buyers are,” Sondhi told HuffPost Canada.

“We might be in a situation where (prices) start to accelerate into the uncomfortable zone.”

Peter Norman, VP and chief economist, Altus Group

 

Still, TD’s forecast makes a few big assumptions. One is “that provinces take tentative steps towards re-opening their economies over the next month.”

Another is that the country won’t see a sudden rush of people who need to sell their homes quickly, thanks to the banks’ new mortgage deferral programs.

Not everyone agrees. At least one recent forecast says the country will likely see some “forced selling” in the housing market.

And what about the millions of Canadians who have lost work in this crisis? Won’t their plight affect house prices?

Like some other economists, Sondhi says that won’t have as much impact on the housing market as one would think.

That’s because, they say, the jobs lost in this crisis have disproportionately affected people in service industries ― think customer service reps and Starbucks baristas ― and these people overwhelmingly tend to rent.

“While it is sad that these people skewed strongly to young and to part-time workers, for the housing industry, the impact of these presumably temporary job losses will be limited as these groups are much less likely to buy and sell real estate,” Phil Soper, president and CEO of real estate agency Royal LePage, said in a report earlier this month.

TD’s forecast sees Toronto house prices rising 7.8 per cent this year, compared to last year, while Vancouver will see 4.7 per cent growth. Things will look worse on the Prairies, TD predicted, where the oil slump will lead to a 4.7 per cent price decline in Alberta, and a 4.1 per cent drop in Saskatchewan.

“Sales are poised to plunge at an historic pace in April, while gradually recovering their lost steps in subsequent months as buyers remain cautious,” the report states.

‘Uncomfortable zone’
In a separate report Wednesday, real estate services firm Altus Group predicted a more than 50 per cent drop in home sales in the April-June period this year, before bouncing back in the second half of 2020, to end the year at around 10 per cent below the previous year’s sales.

Although there is a “broad range of outcomes” possible in these uncertain times, ”it’s very unlikely we’ll see significantly declining house prices,” Altus Group vice-president and chief economist Peter Norman told HuffPost.

“The odds are better that … we might be in a situation where they start to accelerate into the uncomfortable zone.”

He predicts price growth in the 5 to 10 per cent range for this year, because there will be many buyers who will be “ready to buy” once shutdown orders are lifted and social distancing rules start to be eased.

“We think this recession is going to be deep but quick, and the economy will recover quite quickly as soon as we substantially get through the health crisis,” he said.

Mayor John Tory says Toronto could face a budget shortfall of nearly $2.8 billion as a result of COVID-19’s lasting impact on the city.

Tory announced the news Friday afternoon during his daily briefing, calling the coronavirus outbreak “one of the greatest financial challenges the city has ever faced.”

During his briefing, Tory said the City continues to lose $65 million a week, $20 million of which comes from lost revenue from the TTC, while other funds are lost through closures, decreased service demands, and property tax and utility payment deferrals.

Tory said the City’s finance staff has crunched these numbers and determined that a three-month lockdown and six-month recovery period, during which time neither revenue nor expenses are expected to return back to normal, could cost the city $1.5 billion.

According to the City, $938 million is estimated for the direct impacts relating to the lockdown and $590 million for a six-month recovery period, once restrictions are eased. “This pressure may be driven higher if there is a significant real-estate market impact, the physical distancing measures are extended beyond 12 weeks or there continues to be additional waves of COVID-19 throughout the remainder of the year.”

“That is the best-case scenario,” said Tory.

And while Tory hopes the length of the lockdown and recovery periods are as short as possible, the City has to go on the assumption that they may last longer.

Tory described a second scenario, which includes a nine-month lockdown and a 12-month recovery period, that could end up costing the City $2.76-billion by the end of this year. Tory added that the costs could carry over into 2021, as the recovery period could last into the new year.

Mayor Tory said that staff continue to scour the City’s expenses for any kind of savings and that talks are ongoing with higher levels of government on possible financial support.

Either of Tory’s scenarios will eat up a considerable amount of the City’s approved operational budget for 2020, which is $13.53-billion.

According to reports, the City had initially projected the shortfall to be somewhere closer to $780-million. However, this projection factored in much shorter lockdown and recovery periods that would last through the end of June.

Love it or hate it — whether you’ve witnessed the meteoric rise in your property’s value over the past decade, or felt the deep frustration of wondering if you’ll ever be able to afford a home in the city — there are few among us without a strong opinion.

That was the case long before the city came to a grinding halt in the face of COVID-19.

Today, in the midst of these uncertain times, most of us find ourselves at home, wondering what post-lockdown life is going to look like.

And while there is no shortage of opinions — everywhere, from everyone — the real estate hot takes are especially interesting.

That’s because they are all over the place.

Some say what was poised to be the hottest spring market on record is just on pause, and will reactivate the moment eager buyers and sellers are released from quarantine.

Others forecast a much bleaker picture than business as usual.

Surely Toronto real estate can’t emerge unscathed from a global economic downturn with historic unemployment numbers, and questions about if and when the next wave of the virus will hit?

Will it mirror the fall and recovery of the great recession of 2008-2009, or not?

While there is no shortage of educated people with intelligent opinions, we just don’t know yet.

Given that the definition of “market value” is what a given property will sell for on the open market, we will need the real estate market to open up again before we can get any real sense of our new normal with respect to house prices and property values.

In the meantime, there have been some government decisions made in response to the COVID-19 pandemic that are already having an impact on the here and now.

After years of historically low vacancy rates on the rental market, largely attributed to investor-owners experiencing bank-robber returns through short-term rentals, the lockdown had an immediate impact.

Suddenly investors have unrentable units to carry.

Almost immediately Craigslist and Kijiji were flooded with new rental apartments.

For renters who have been forced to endure once-inconceivable bidding wars on apartments approaching peak unaffordability, this is great news.

More supply means less demand — you can expect prices to adjust accordingly.

Even without a crystal ball, we can certainly expect to see an immediate impact on the condo market.

Those same investor-owners are suddenly entering their second month of lockdown with no clear end in sight.

Mortgage relief options are limited for non-principal residences, and the short-term rentals that used to cover costs and then some are now banned outright in the province.

Many investors will find they have no alternative but to offload, so it would be entirely reasonable to expect a rise in “distress sales.”

Even pre-construction condominiums will surely take a hit as buyers under contract, now experiencing lost earnings and unemployment, may no longer qualify for financing and could be unable to close on their deals.

Is this bad news?

For some it’s not great.

But is it opening up a wedge of opportunity for buyers and renters who have long needed a break? Absolutely.

So, while we have all surely lost patience with false optimism in the midst of this pandemic, everything isn’t completely awful.

Canadian home prices rose at a brisk pace in March, led by the capital region of Ottawa-Gatineau, data showed on Monday, even as measures taken to contain the coronavirus outbreak pummelled economic activity.

The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices were up 0.6 per cent in March from February.

The price gain was double the average rise for March over the past 10 years, said Marc Pinsonneault, a senior economist at National Bank of Canada.

Prices rose in seven of the 11 metropolitan areas in the index, with Ottawa-Gatineau up 1.1 per cent and Vancouver climbing by 1 per cent.

Compared with the same month a year ago, the index climbed by 3.8 per cent, its strongest pace since June, 2018. It was the eighth consecutive month that the year-over-year gain accelerated.

The Bank of Canada has slashed interest rates by 150 basis points since the start of March to ease the economic impact of the coronavirus pandemic, but mortgage rates have not fallen as much due to strains in financial markets. (One hundred basis points equal one percentage point.)

Data this week from the Canadian Real Estate Association showed that buyers and sellers in the housing market moved to the sidelines over the second half of March. Also this week, a flash estimate from Statistics Canada showed that Canada’s economy shrank a record 9 per cent in March from the previous month.

Canadian real estate buyers largely ignored warning signs going into last month. Canadian Real Estate Association (CREA) data shows sales climbed in March. Due to the pandemic, the country had distinct pre and post markets. Pre-pandemic declaration, a large number of buyers didn’t think the deteriorating economy would impact them. Post-pandemic declaration, buyers were literally ordered to stay home, slowing them down.

Canadian Real Estate Sales Rise 8%
Canadian real estate sales made a surprisingly large climb, considering the pandemic. There were 43,317 unadjusted sales in March, up 13.51% from a month before. This represents an increase of 7.85% compared to the same month last year. Now, while this is a big number for growth – it needs a lot of context.

Canadian Real Estate Sales

The read on annual growth was skewed due to the pandemic, and last year’s weak numbers. COVID-19 placed a number of restrictions on the largest markets mid-month. This prevented a lot of activity from happening, especially in Toronto and Vancouver. If growth looks low to you – that would be why.

Canadian Real Estate Sales Change

Last year’s weak Q1 numbers helped March to seem like it was on its way to much more impressive growth than reality. This becomes more obvious when you look at a longer timeline of the month. Last year’s March sales volume was the third lowest in a decade – an easy hurdle to clear.

March Canadian Real Estate Sales

Greater Vancouver Real Estate Was The Fastest Growing
Greater Vancouver led the market on the bounce higher, followed by Quebec, and Fraser Valley. Greater Vancouver saw 2,562 sales in March, up 46.8% from a year before. Quebec City jumped to 1,139 sales, up 29.6% from last year. Fraser Valley, the board adjacent to Vancouver, came in third with 1,365 sales, up 17.3% from last year. Both Greater Vancouver and Fraser Valley reported unusually weak Marches last year, so the growth sounds a little more impressive than it was.

Canadian Real Estate Sales By Market

Calgary, And Southern Ontario Are Big Losers
Calgary made the biggest decline of any major market in terms of sales. The city reported 1,526 sales in March, down 9.8% compared to the same month last year. The Niagara region fell to 434 sales, down 7.3% from a year before. Victoria made the third biggest decline with 576 sales, down 4.6% from last year. Calgary was fighting a rapidly deteriorating economy before the pandemic compounded issues. So it’s not entirely surprising it led lower.

Canadian Real Estate Sales Change By Market

Considering most markets are locked down for April, there’s not a lot of insights to draw. Next month’s numbers will have minimal volume, which isn’t representative of an efficient market. Price movements in either direction won’t make a whole lot of sense on such thin volumes. Instead, the indicators to keep an eye on are employment, output, and debt.

 

National sales and new listings were stifled in March, as home buyers and sellers across the country remained on the sidelines in the second half of the month in reaction to healthcare and economic measures to combat COVID-19.

Although sales crept up 7.8 per cent year-over-year (y-o-y), there was a stark decline in sales compared to February of this year, when the market was gearing up for a busy spring season. Compared to last month, home sales fell 14.3 per cent nationally, with declines experienced across major markets across the country. The Greater Toronto Area (GTA) saw the largest month-over-month (m-o-m) decline of 20.3 per cent, followed by Montreal (-13.3 per cent) and the Greater Vancouver Area (-2.9 per cent).

National home prices grew 12.5 per cent to $541,926. Excluding the GTA and Greater Vancouver, this figure drops nearly $130,000. The Home Price Index, which reflects the value of homes sold grew slightly m-o-m by 0.8 per cent, and 6.9 per cent y-o-y.

COVID-19 Impact Reflected in Second Half of March
While there was an overall increase in y-o-y sales, CREA’s senior economist, Shaun Cathcart noted that “numbers for March 2020 are a reflection of two very different realities, with most of the stronger sales and price growth recorded during the pre-COVID-19 reality which we are no longer in.” CREA notes that data for the second half of March considered in tandem with preliminary figures for April paint a different, more realistic picture of the current state of the market as illustrated by early April numbers trending at about “half of what would be normal for that time of year.” As such, although we can begin to see some shifts, the full impact of COVID-19 on Canada’s housing market will be more apparent in the coming weeks.

As more buyers and sellers reconsidered entering the market over the course of March, new listings reflected a similar downward trend to sales, with a 12.5 per cent drop since February 2020. As such, the 12-month moving average sales-to-new-listings ratio (SNLR), which is a measure of buyer competition, inched back to 62.1 per cent from 54.6 per cent last year. For reference, a range between 40 – 60 per cent indicates balanced conditions, while below and above that threshold indicate local housing market conditions favouring buyers and sellers, respectively.

Given the magnitude and impact of COVID-19 response measures across the country, Canada’s national housing market remains relatively stable in the immediate term, with CREA stating that “this measure of market balance was remarkably little changed“ compared to February. They report that two thirds of markets remained in balanced territory over March, with the remainder exhibiting sellers’ market conditions.

Months of inventory – a measure of the time it would take to liquidate available market supply at the current rate of sales activity – is sitting at 4.3 months nationally, which is half a per cent higher than February, but still nearly a full percentage point lower than the long term average of 5.2 months. As noted earlier, this can be attributed to the steep drop in sales and new listing activity in the latter half of March.

Home Prices Continue to Trend Over Regional Lines
The ongoing regional trend in home price activity continues across the country, with Ontario experiencing a 14.7 per cent annual increase in average home prices to $682,779 and British Columbia also experiencing an uptick in average price growth of 14.9 per cent y-o-y to $788,425.

The average price in the GTA rose 14.5 per cent y-o-y to $902,680 although the rate of growth was slower compared when compared to February, when average prices grew 16.6 per cent y-o-y. Further East, Ottawa average home prices continued on an upward trajectory last month, rising 18,3 per cent annually to $516,276. Montreal followed suit, with a 10.4 per cent annual increase in average prices to $433,750.

In Western Canada, Vancouver average home prices sit at $1,080,193, up nearly 10 per cent y-o-y. In the Prairies, both Edmonton and Calgary experienced annual average price declines at 4.7 per cent and 3.4 per cent respectively.

Learn more about how home prices performed in markets across Canada in March in our infographic below:

 

Rocky months lie ahead for Canada’s commercial real estate market, but the sector will likely experience a remarkable revival once the COVID-19 crisis passes, Morguard Director of Research Keith Reading predicted.

“Confidence that the virus is under some degree of control, ideally a vaccine, but minimally a treatment or processes that minimize exposure … will boost the confidence of consumers and businesses. As a result, consumers’ demand will improve, which will expand businesses and eventually the economy will recover,” Reading said in an interview with MBN. “Then, property owners and managers will have confidence that tenants will be able to pay rent and eventually expand. As economic outlook improves, investor confidence will increase.”

Such a virtuous cycle might also play a part in the recovery of the similarly beleaguered residential market, according to analysts.

Reading also said that the commercial market is ideally placed to respond to the sea change brought about by the pandemic.

“COVID-19 has emphasized the importance of human interaction and technology,” he said. “The commercial real estate sector will evolve to accommodate both people and business in the future. Mixed use will continue to expand and health and sustainability will move further to the forefront. Owners and managers will position assets to best meet the needs of businesses and people moving forward.”

Industry players can draw assurance from the segment’s fundamental robustness, Reading said

“In my over 30 years in commercial real estate, the commercial sector has risen to the challenge of several downturns including the late-80s’ recession, the dot-com crash and the Great Recession/financial crisis. I have no doubt the industry will rise again, after the arguably most significant crisis since the 1930s’ Depression,” he said . “Through it all, people and businesses have needed places to live and work. I don’t see that changing.”

Despite the ravages of the pandemic, Canadian housing prices will prove remarkably robust, according to Royal LePage.

In its recent analysis, Royal LePage projected that the widespread economic weakness brought about by COVID-19 will pull down Canada’s average housing price by just 3% this year, should the slowdown last until late summer.

This will put the nationwide aggregate home price at $627,900. More optimistic estimates place the outbreak’s impact being contained to just the second quarter, which might lead to an annual price increase of 1% to $653,800.

The first quarter saw the aggregate Canadian home price increase by 4.4% year-over-year to $655,276. Last December, Royal LePage predicted prices to grow by 3.2% in 2020.

“From our experience with past recessions and real estate downturns, we are not expecting significant year-over-year price changes in 2020,” Royal LePage President and CEO Phil Soper said.
“Home price declines occur when the market experiences sustained low sales volume while inventory builds. Currently, the inventory of homes for sale in this country is very low, matching low sales volumes as people respect government mandates to stay at home.”

However, Soper cautioned that social distancing policies and lockdowns will be moderating factors that will place “downward pressure on both home sales volumes and prices.”

“Equally, if the collective efforts of Canadians slow the spread of the disease to manageable levels, and if promising science and therapeutic drugs are announced, people will return to their jobs, market confidence will bounce back quickly, and we could see Canada’s real markets roar back to life, with 2020 transactions delayed but not eliminated,” he said.

Real estate market activity in Toronto is off by 60-65 per cent, according to realtor Barry Cohen, of Barry Cohen Homes. But that doesn’t mean things have fallen off a cliff. Most buyers and sellers have pulled back to wait it out, but others cannot or will not. And those people are looking for creative and safe new ways to move forward.

According to Cohen, who operates in the luxury home market and is one of the top realtors in the country, this spring was shaping up to be the best Toronto has seen in 20 years. When the new COVID-19 measures came in, including banning open houses, the market froze as transactions have dropped like a rock and prices have started to pull back.

Unlike the last major correction of this magnitude that ran from 1989-1993 when the future was unclear, what we are experiencing now has an end game, he says. There are treatments and vaccines on the way. The curve is flattening in Canada, and things will return to normal. Combine this reality with interest rates at historic lows, and Cohen sees a lot of pent up demand that should snap the market by late 2020 or early 2021.

Jamie Dempster broker at RE/MAX Hallmark Jamie Dempster Group who operates primarily in the under $2 million market, is still busy. He has sold four homes and leased two condos in the last couple weeks.

“It is less frantic and rushed, one month ago we saw flashes of the 2017 spike in prices, bidding wars and general frantic behaviour,” he says. “People are acting much more cautious and not diving into situations.”

Whoever remains in the interim market is very serious about making a move right now, and forward-thinking realtors are making it happen thanks to cutting-edge technology that allows for maximum physical distancing.

“There is more of a sense of urgency, as opposed to the tire kickers who are just checking things out,” says Cohen. “The reality is that people are rightfully very concerned about going into homes, and we need to and are adapting.”

Cohen’s firm has two pieces of key technology to facilitate a true-to-life experience as possible for potential buyers. Firstly, there is virtual staging.

“Many agents didn’t have the ability to stage, and most sellers were not willing to participate given the health concerns,” Cohen explains. “So, what we do is that we impose staging on photos of the home. We can create any style, we can change wall colours, add a different type of chandelier and that really helps us to show what the home can become.”

In addition to virtual staging, there is also enhanced 3D modelling that allows potential buyers to have a very realistic walk-through of the home. In these tours, currently done by a third party operator but soon to be done in-house, every nook and cranny can be viewed in high definition and at the buyer’s own pace.

“You feel like you’re actually walking through the home,” Cohen says.

This technology, he adds, has actually been in use the last couple of years, but agents didn’t use it that much.

“Before, this technology was criticized for showing too much,” Cohen explains. “But now it is this golden opportunity to really do the best, closest thing to physically being on a home tour.”

Most of the listings on Cohen’s website utilize the new technology and web traffic has actually increased by a whopping 500 per cent in recent weeks while users are spending much more time viewing each property.

These new tools are combined with others also coming to the fore across all business sectors such as Zoom meetings for listing interviews, as well as DocuSign and electronic signatures for transactions.

Dempster has connected both buyers and sellers via Facetime to conduct property tours and uses a virtual tour platform called Matterport to showcase homes.

Home inspections still need to be conducted in person, but the current operating procedure has inspectors going into homes alone and with full safety measures in place then reporting back to the buying team.

Some of the changes have been so well received that both Cohen and Dempster said they would make them permanent after the shutdown.

That being said, although there is much that can be done on the digital side, there is always a human element that is hard to replicate, says Dempster.

Both said, some face-to-face interactions are still necessary on occasion and are handled with a great number of precautions. But, with the vast majority of in-person communications over that has resulted in an overall tempering of the market.

“A huge part of our job is to understand people’s needs, fears, concerns. Although we are managing virtually, nothing replaces the in-person connection and developing a trusting relationship with our clients,” he explains. “We are seeing a big decline in cold leads coming in, meaning people who haven’t met me and wanted to before engaging our services. As a result, they are holding off on listing or buying.”

As we approach the midpoint of April, there is already talk of ways Toronto and other cities can exit the shutdown and phase in industries that have been closed.

In an opinion piece written for a local website, TRREB president Michael Collins said, “If social distancing measures begin to loosen starting in the mid-to-late summer, then we could see a strengthening demand for ownership housing throughout the fall and into the winter. News of employees returning to work and extremely low mortgage rates could also fuel tighter market conditions.”

As ridership continues to drastically decline on both regional and local transit — 90% on GO transit and 80% on the TTC — while people work from home or self-isolate during the pandemic, it’s safe to say the public is moving around differently as the COVID-19 outbreak powers on.

To get a better understanding of the impact social distancing has had so far during the outbreak, Apple has released a mobility trends tool that pulls information from users of its Maps navigational app to provide a look at the change in the number of routing requests made within the Maps app for three modes of transportation: driving, walking, and transit.

The purpose of the Mobility Trends Reports tool is to provide Apple Maps data that may offer insights to local governments and health authorities looking for ways to slow the spread of COVID-19. Apple says the data could also be used as a foundation for new public policies by showing the change in volume of people driving, walking or taking public transit in their communities.

Apple says the new Mobility Trends Reports aggregates data from major cities and 63 counties or regions. You can use the online tool and search by country, region, or city to see specifics trends for an area. For instance, you can search “Toronto” to see that all monitored forms of transportation are down significantly, with walking down 71%, driving 73%, and transit by 86% since January 13, 2020.

The data is updated daily and can be found on Apple’s website or it can be downloaded in a broadly compatible CSV format.

As you would expect from Apple, privacy is at the forefront of the new Mobility Trends Reports, and the tech giant says the data is aggregated from Apple Maps and not associated with Apple IDs.

Is the Canadian real estate industry too big to fail? Maybe. It just depends on how you define failure.

While RBC has said that homes sales in Canada could drop as much as 30% this year, they’ve also said they believe there is a “low risk” of a full market collapse. Similarly, RE/MAX has also suggested the odds of the country’s real estate bubble being burst are low.

And now it’s Royal LePage’s turn.

The real estate giant has released both its quarterly Canadian House Price Survey and Market Survey Forecast today, predicting different scenarios depending on the length of the COVID-19 lockdown.

That said, the overall belief from Royal LePage is that “the aggregate price of a home in Canada is expected to remain remarkably stable through the COVID-19 pandemic.”

Just how stable prices remain depends on how long the current states of emergency last throughout the country, and how long the resulting social distancing and stay-at-home restrictions are in place. Not to mention the economic consequences currently being felt by millions of Canadians.

If the measures currently in place across the country are lifted before the end of the second quarter, Royal LePage is forecasting that overall prices for Canadian homes will end 2020 relatively flat, with the aggregate value up 1% year-over-year to $653,800. If, however, COVID-19 restrictions remain in effect throughout the summer, this could drive home prices down by 3% year-over-year to $627,900. Essentially, the average difference between a quick reprieve from current measures and a longer lockdown is about $26,000.

“The impact of COVID-19 on the Canadian economy has been swift and violent, with layoffs driving high levels of unemployment across the country. While is it sad that these people skewed strongly to young and to part-time workers, for the housing industry, the impact of these presumably temporary job losses will be limited as these groups are much less likely to buy and sell real estate,” said Phil Soper, president and CEO, Royal LePage. “From our experience with past recessions and real estate downturns, we are not expecting significant year-over-year price changes in 2020. Home price declines occur when the market experiences sustained low sales volume while inventory builds. Currently, the inventory of homes for sale in this country is very low, matching low sales volumes as people respect government mandates to stay at home.”

In December 2019, Royal LePage had forecast the national aggregate price to increase 3.2% by the end of 2020.

Toronto and GTA
In the GTA, where demand has remained high, the aggregate home price rose 7.5% year-over-year in the first quarter of 2020, arriving at $866,211. Royal LePage broke this down between two-storey homes and bungalows, which saw 7.7% and 3.7% rises to $1,010,004 and $826,186, respectively.

Likewise, the average condo price in the GTA rose 8.8% year-over-year to $580,508 in the first quarter of 2020.

“Toronto real estate appreciated rapidly in the first quarter as the demand that began in the second half of 2019 kept its momentum while inventory remained low. However, by mid-March both buyers and sellers had pulled back to adhere to social distancing measures and gauge the impact of the pandemic on the market,” said Kevin Somers, chief operating officer, Royal LePage Real Estate Services Limited.

Much like the rest of the country, the forecast for Toronto and the GTA depends on how long the current COVID-19 restrictions remain in place. If lifted soon, the GTA could see a 1.5% y-o-y increase in home prices by the end of the year ($861,100). If quarantine remains in place throughout the summer, the GTA could see a decrease of 0.5% y-o-y in aggregate home prices ($844,200). The difference between those two scenarios is $16,900.

Either way, Royal LePage’s market survey suggests the GTA housing market will come out of this pandemic in much better shape than most Canadians.

Royal LePage is predicting that Toronto area home prices could still rise this year, despite the COVID-19 crisis.

In its first-quarter report, released Tuesday, the brokerage says that if the pandemic recedes by the end of second quarter, prices could jump up 1.5 per cent year-over-year, to $856,263 by the end of 2020.

However, if the lockdown continues to the end of August, the company expects house and condo prices will contract by 0.5 per cent year-over-year to $851,982.

Although Toronto’s housing market had a strong first-quarter, with aggregate resale prices rising 7.5 per cent year-over-year, that won’t be enough to compensate for the loss of eight to 12 weeks in the busy spring real estate season, said Royal LePage CEO Phil Soper.

About 22 per cent of sales typically occur in the first quarter of the year.

“We’re not anticipating an immediate recovery,” he said.

Even when the economy begins to move again, people will still be wary of each other and sellers will be more hesitant to allow strangers to tour their homes.

But once consumers feel more comfortable, Soper said economic stimulus, such as low interest rates, competition among lenders and softer prices, will kick-start the market.

The “swift and violent” impacts of COVID-19 have disproportionately hit younger and part-time workers across the province, groups less likely to be in the housing market, he said.

That’s why the real estate sector will be one of the prime lifters of the economy when health protocols are relaxed, just as it was following the global downturn in 2008 and 2009, said Soper.

“It was really the entry of the first-time buyer and the housing consumer that brought the Canadian economy back after the great recession,” he said.

Soper said it may appear as if real estate prices have plummeted when the country goes back to work. There will be headlines touting dramatically lower selling prices. But those will likely be a few distressed sellers accepting lower prices that lower the overall average.

There will also be some opportunities for buyers who might otherwise have been faced with competitive offers — something that was a growing concern in the heated market of the first part of the year.

“One of the really challenging things we saw coming in 2020 before the health crisis, was the psychology of multiple defeats where you put an offer in and you lose and you lose and you lose. Eventually people either drop out (of the market) in frustration or they overpay. We should see a lot less of that,” he said.

The Toronto Regional Real Estate Board (TRREB) had been forecasting a 10 per cent rise in GTA housing prices this year before the COVID-19 restrictions stopped showings and stalled all but necessary transactions. The board has suggested that it will have a better idea of where prices and sales are heading later this spring.

Royal LePage’s report says that Toronto’s outlook is relatively optimistic compared to the national picture. It projects that Canadian home prices could grow 1 per cent if the economy starts churning again by the end of June.

But if business is locked down through the summer, housing will likely contract about 3 per cent.

Real estate lawyer Mark Weisleder has some pragmatic advice for buyers, sellers and real estate agents facing conundrums around closing deals: “You must find a way to make it work.”

The partner with Rea lEstate Lawyers LLP says the fallout from the coronavirus pandemic is leading to all manner of glitches between the time when a buyer and a seller sign an agreement of sale and the transaction closes.

“We’re in a different world now,” Mr. Weisleder says. “You have to understand what you took for granted can’t happen.”

Some of the issues surrounding real estate deals involve buyer’s remorse. Lenders, appraisers and movers all face disruptions to their way of doing business.

Mr. Weisleder has been sorting through such dilemmas with local real estate boards around Ontario. In February, he couldn’t get five people to join his online sessions, he jokes.

“Now I’m getting 500 people on my webinars.”

Feelings of buyer’s remorse surface when people who purchased property during the frothy days of February and early March wonder if they paid too much to beat out legions of competing bidders for a property.

Some of those deals were inked during a time when buyers were paying astounding amounts above the asking price and some bidding wars drew 30, 40 or even 70 plus offers.

By mid-March the market stalled as many sellers pulled their listings, buyers largely retreated and the Government of Ontario began imposing increasingly stringent rules around physical distancing to prevent the spread of COVID-19.

Some of those purchasers may lose their jobs or see their income fall before the closing date. Others may worry about the risks of moving during a health crisis. And some may just fear they overpaid.

Mr. Weisleder believes some buyers were unsettled by so much uncertainty.

“People wonder, how is this crisis going to affect prices and values?”

Once an outbreak of COVID-19 was declared in Canada, a lot of consumers were under the impression they could back out of a deal, Mr. Weisleder says.

“It doesn’t work that way.”

He points to April, 2017, when the market fell almost 20 per cent overnight after a foreign buyers’ tax and other cooling measures were implemented by the provincial government. Buyers backed out of agreements and sellers either couldn’t find another buyer or had to sell at a price substantially less than the first buyer agreed to pay.

The buyers who walked away were often under the mistaken impression they could just forfeit their deposit. In the courts, many ended up being forced to pay for the seller’s losses.

“Sellers sued buyers for substantial amounts of money,” Mr. Weisleder says.

April Esteves, a Toronto-based real estate agent with Royal LePage Real Estate Services Ltd., has not come across any deals that have come apart because buyers fear they overpaid before the crisis.

In the opening months of 2020 right up until mid-March, there was huge demand from buyers, she says.

Buyers looking for condos in the $600,000 range up to $1-million or so have had a hard time in competition.

“When they finally do get something, it’s a relief.”

Ms. Esteves sold a three-bedroom, semi-detached house in Toronto’s High Park neighbourhood on March 16 for $1.63-million, or $400,000 above the asking price of $1.23-million.

A week earlier, Ms. Esteves says, concerns about COVID-19 were ramping up, so she cancelled the open houses she had planned for the property at 200 Indian Grove in Toronto’s west end. Undaunted, potential buyers booked private appointments instead.

“We had a huge amount of showings.”

On offer night, multiple offers arrived electronically.

“For the most part, people are really happy to get into these neighbourhoods,” she says. “They may have waited a long time.

The morning following that sale, the agents in her office packed up their belongings and began working from home.

Ms. Esteves says buyers have mostly moved to the sidelines and agents are reluctant to take on new listings unless a homeowner urgently needs to sell.

She adds that many agents are also discouraging buyers who are hoping to be opportunistic from looking for a deal now because most people don’t want to visit a property in person.

“I don’t think a lot of agents would take that upon themselves.”

Ms. Esteves says some sales are still happening because an estate needs to be settled or a couple is divorcing. Some people have already given notice on a rental or they are moving into the city for the first time.

She has also heard of a trickle-down effect when it comes to closing time. If one party hits a snag, everyone has to work together to work it out.

For example, if a landlord sells an income property and the tenant doesn’t leave by the closing date, the parties have to work out an arrangement.

“We’re really not in position to force that tenant to leave.”

She says relationships between tenants and landlords, buyers and sellers, and competing agents have all become more co-operative than ever before.

“It really is down to a lot of open communication,” she says. “It’s not adversarial.”

Mr. Weisleder also believes that parties need to be transparent and flexible.

He says some buyers do try to negotiate a reduction in price – which the seller may agree to rather than have the deal collapse.

Mr. Weisleder says he typically urges both sides to reach an agreement, whether that involves an extension of the time until closing or an adjustment to the price.

Mr. Weisleder points out to sellers that suing a runaway buyer may not bring a satisfactory result in any case. A first-time buyer, for example, may not have enough assets to make a court battle worthwhile.

“What’s the point of suing someone who doesn’t have any money? We do our best to get the deal done.”

In some cases, a buyer may want to go ahead with a purchase but may not be able to obtain a mortgage for the agreed-upon price. In that case, a vendor may consider extending a loan – which the buyer can pay back over a couple of years – for the difference between the mortgage provided by the lender and the sale price.

Mr. Weisleder cautions, however, that some lenders do not allow second mortgages, so buyers must beware of the small print.

Another hitch can arise if a deal is conditional on a home inspection and the inspection can’t be done because of safety measures. Some home inspection companies have temporarily suspended operations all together.

In cases where an inspection can’t be completed, Mr. Weisleder has suggested sellers offer warranties against flaws in major elements such as the heating and air conditioning system or the roof.

And if an appraiser is reluctant to enter a property, perhaps he or she can wear gloves and a mask and keep the visit very short, the lawyer says. The appraiser may be able to walk around the exterior and come up with an appraisal that satisfies the lender, he says.

“Lenders are being creative too,” he says. “I haven’t heard of deals cancelling because of this.”

In their own practice, Mr. Weisleder and his partners are doing all of their business with electronic document signing and online payments. Upon closing, keys can be sheltered in a lockbox, he says, and the code is supplied to the buyer once they have transferred the money to the lawyers.

As for registering title, Mr. Weisleder says the province’s land registration system is still operating.

Many agents who raise questions during the webinars worry about the possibility of the system closing down, or what happens if there’s a snafu between closing and the time title is registered.

Mr. Weisleder points out many buyers also acquire title insurance to protect against loss or damages from things such as liens and encumbrances. So-called gap coverage, he explains, is designed to bridge that time between closing and registration.

One setback his practice has come across is that the banks still require that funds provided to pay off the seller’s existing mortgage be handed over in the form of a certified cheque.

Mr. Weisleder would like to see that changed to an electronic funds transfer.

“The bank is so set in their ways,” he says. “If it takes a crisis to change this, it should.”

The Canadian housing market is in turmoil — at least that’s what the stock market is suggesting. Real estate firms like Brookfield Property Partners LP  have seen their shares slide by more than 50%.

So far, the impact on residential housing is unclear. But early data indicates that private homeowners should be nervous.

“The national trend in housing starts declined in March, likely indicating that the COVID-19 pandemic has begun to impact residential construction activity,” said Canada Mortgage and Housing Corporation Chief Economist Bob Dugan.

Activity in Toronto and Montreal trended lower, reflecting broader declines in their respective provinces. While Vancouver registered an uptick, it wasn’t sufficient to offset an overall decline in British Columbia.

It’s important to note that data for the Canadian housing market is a lagging indicator. Housing starts won’t start slowing dramatically for another month or two.

Meanwhile, prices won’t start to slide until inventory rises and unemployment forces many to downsize. All of this means that a true Canadian housing market crash may not happen until the summer.

If you own a home or are invested in real estate, here’s what you need to know.

The tale of two crashes
The coronavirus pandemic presents a clear short-term challenge, while the oil collapse could mean a longer-term hurdle. Let’s take a look at both of these scenarios.

The crisis that’s most impactful is the coronavirus pandemic. Shelter-in-place orders have deserted city streets. Meanwhile, traffic in rural areas is largely relegated to grocery shopping trips. No one is unaffected.

One of the biggest problems is the rapid rise in unemployment. Hospitality and food service jobs have evaporated overnight, but other occupations have also started to feel the squeeze in recent weeks. The longer the crisis endures, the more pain there will be.

Last week, Trudeau reported the worst jobs report in modern history. “Job losses were felt across all provinces, with the largest in Ontario, Quebec, British Columbia, and Alberta,” reported CityNews. “Ontario shed 403,000 jobs, Quebec lost 264,000, B.C. saw a drop of 132,000, and Alberta lost 117,000 compared to just one month earlier.”

Even if the pandemic begins to ease, the job losses are likely in the early innings.

This brings us to the second headwind: the oil crash. Since 2020 began, oil prices have slid from US$60 per barrel to nearly US$20 per barrel.

The long-term impacts are still being felt, as a large portion of Canada’s oil production breaks even at US$30 per barrel and above. Many mega-projects require US$40 per barrel or above to stay in business.

Few Canadian’s are monitoring this second crisis closely, but the longer the oil downturn persists, the more likely it is that the energy sector will hemorrhage jobs. Given that the sector is responsible for 10% of Canada’s GDP, that’s bad news.

The Canadian housing market is nervous
While the housing market is directly affected by the health of the economy, it tracks more than just GDP. The most important figures are employment and wages. Canadians, after all, need jobs and minimum levels of income to afford a home.

As we’ve covered, the coronavirus pandemic and the oil collapse is causing the largest spike in unemployment in Canadian history. The longer these challenges exist, the more likely they are to cause long-term damage.

Housing starts and sale prices are lagging figures, so you won’t understand how your home is personally affected by the downturn for several months. But if we can glean anything from real estate stock prices, it’s that the future is grim.

Now is the time to revisit your personal finances. Assume that your home’s value is already much lower than you anticipated. While some Canadians won’t experience much of a shock, others will see their financial lives upended.

If we do experience a sharp downturn in the Canadian housing market, it may be a chance for first-time home buyers to jump in.

At minimum, most of us should be trying to shore up cash to invest in dirt cheap stocks following the market crash.

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With open houses now prohibited in many regions amid the COVID-19 pandemic, real estate agents are looking for ways to showcase their properties without putting their clients and potential buyers at risk. Enter the video walkthrough, a feature typically reserved for the sale of luxury homes with generous marketing budgets.

But we’re here to tell you that you don’t need a $1,400 DSLR camera to shoot professional-looking video walkthroughs. The Livabl team has filmed and edited over 120 home tours for our YouTube channel, often using budget accessories like a $30 LED light or a garden cart in lieu of a dolly track. Here we’ve rounded up our top tips for real estate agents who want to create compelling video walkthroughs without shelling out a lot of cash.

1. Declutter and stage the property
Prepare the property as if you were hosting an open house. That means cleaning out the closets, mowing the lawn, putting away family photos and clearing all surfaces of clutter. Even while filming homes that have been professionally staged by interior designers, we’ve had instances where a water bottle or dog toy gets left in the way and it ruins an otherwise perfect shot. Don’t forget to look in less obvious places too; a wide-lens could capture the baseball bat your client keeps hidden under the bed in case of intruders.

2. Prepare a shot list
Preparing a shot list ahead of time will help you maintain focus on the day of filming. Think about the home’s top selling features and how you can highlight them. Have the owners installed new quartz countertops? Hone in on the subtle, marble-like veining to show it off.

It’s also a good idea to sketch out a floorplan of the home and decide the order of the rooms you’re going to film. When you reach the editing stage, the video will flow more naturally. Don’t forget to capture some shots of the exterior and any private outdoor spaces.

3. Consider the time of day and weather conditions
Shoot with natural light whenever possible. The quality of your video will look infinitely better and it will send a message to buyers that this home is bright and airy. That being said, filming on a clear day might cause an abundance of sunlight to stream in and ‘blow out,’ or overexpose, the windows. Slightly overcast conditions are more preferable because the light is diffused through the clouds and shadows tend to be softer.

Here at Livabl, we like to schedule our shoots in the morning when the light is not as harsh. If you arrive at the property in the late afternoon, you also risk running out of daylight hours. Always give yourself more time than you think you’ll need, otherwise, you may have to rely on artificial lighting, which can cause your footage to appear yellowish and unnatural.

4. Add artificial light when necessary
Even if you’ve followed all of the rules listed above, you may still encounter a space that’s dark and dingey. To brighten it up, you could purchase an LED video light online for less than $50 or use a torchiere floor lamp to bounce light off the ceiling and cast a softer glow. If the home you’re selling has under-cabinet lighting in the kitchen or pot lights throughout the living room, you may want to keep them turned on to showcase those features to potential buyers.

5. Invest in a smartphone gimbal stabilizer
Video stabilizers have come a long way in recent years and you can now purchase a handheld smartphone gimbal for as low as $70. They’re essentially glorified selfie sticks that allow you to shoot really smooth video footage while in motion and capture interesting angles. Smartphone gimbals are much easier to lug around than a traditional tripod and there are thousands of YouTube videos dedicated to gimbal moves that will lend your video some cinematic flair.

6. Buy an inexpensive lavalier microphone
The vast majority of video walkthroughs do not feature narration, but if you’re looking to personalize your tour, you might consider purchasing a lavalier (or lapel) microphone on the cheap. Using your phone or camera’s built-in microphone is not ideal, as it picks up a lot of background noise. A lavalier microphone is unidirectional, meaning it hones in on the speaker.

There are several models that plug directly into your smartphone and you can use the Voice Memos app (or your app of choice) to record crisp, clear audio. If you tend to ramble or are short on time the day of the shoot, you might want to record the audio separately and follow a script.

7. Consider a wide-angle lens for your camera phone
A wide-angle lens allows you to capture a large space like a great room or kitchen without having to pan and also makes smaller rooms feel more spacious. If you have a newer Android or iPhone, you already have a great wide-angle lens built-in — just make sure you know how to zoom out properly.

For older smartphones or those who want to be a little more creative with their shots, clip-on lens kits are readily available online. These usually come with a variety of lenses including wide-angle, fisheye and telephoto. But as is the case with DSLR cameras, not all lenses are created equal. Poor quality glass can distort the image, so make sure you choose a reliable brand. Olloclip and Moment are household names in smartphone photography and although they’re a bit pricier, they offer better quality visuals, durability and are compatible with multiple smartphones.

8. Get creative with composition and close-ups
Wide-angle lenses are great for showcasing entire rooms, but when you’re selling a home, you also want to emphasize the design details, like a gooseneck faucet or cabinet hardware. Flex your creative muscles by applying the rule of thirds to your shots or experimenting with soft focus. Capture a mix of wide shots, pans and close-ups to make your video more dynamic and exciting.

9. Download the FiLMiC Pro app for iOS and Android
FiLMiC Pro is your phone’s built-in camera on steroids. For about $15, you can access DSLR-like settings that allow you to manually change the frame rate and shutter speed, monitor audio levels, lock in focus and exposure, adjust the white balance and much more.

We’re particularly fond of the ability to turn off the stabilization feature the newer iPhones are equipped with. If you’re using a smartphone gimbal, the iPhone OIS (optical image stabilization) will conflict with the stabilization that the gimbal provides, resulting in some Blair Witch Project-inspired camera shaking. Thankfully, FiLMiC Pro takes care of that issue.

Next week we’ll be publishing a follow-up to this article on editing tips for video walkthroughs so stay tuned!

Virtual tours and video walkthroughs are often used by new home and condo developers to showcase their unbuilt projects to potential homebuyers. Using advanced imaging capabilities and other tech, these tours offer customers an immersive 3D experience with life-like visuals to make them feel like they’re actually there.

With sales centres and model homes now closed because of the COVID-19 pandemic, virtual tours are particularly helpful for those who are currently in the market for a new home or planning to make a purchase in the future. To help you with your home search, we’ve rounded up eight new home and condo developments in the GTA that are offering a virtual peek inside.

1 . The Randall Residences

Developer(s): Rosehaven Homes
Location: 300 Randall St, Oakville
Priced from: $2,450,000

The Randall Residences is a luxury condominium by Rosehaven Homes in the heart of South East Oakville. The four-storey residence features elegant Beaux Arts-inspired architecture by renowned Canadian architect Richard Wengle. Characterized by a precast stone façade with limestone details, symmetrical window fenestrations, and formal cornices and columns, the exterior architecture exudes a timeless design reminiscent of historical Parisian buildings.

Construction wrapped up last November with an official grand opening and ribbon-cutting ceremony, but there’s still plenty of lavishly-appointed suites to choose from. Prospective homebuyers can take a virtual tour of some of the units available, including two expansive penthouses here.

2. Glen Agar

Developer(s): Minto Communities Canada
Location: Glen Agar Drive, Toronto
Priced from: $1,639,900

A rare offering in Toronto’s real estate market, Glen Agar by Minto Communities Canada is a master-planned community of large, single-family homes within city limits. Located in an established neighbourhood in the heart of Etobicoke, Glen Agar consists of a limited collection of 53 single-family homes on 30-foot lots. The homes are nestled on a quiet enclave with two cul-de-sacs with little-to-no through traffic and are surrounded by tranquil green spaces to the east, and Glen Agar Drive to the west.

The homes boast three-storey designs with a mix of modern and traditional elevations, including Tudor and Georgian-inspired architecture characterized by varied rooflines with steep pitches, wrought-iron accents and brick and stone facades with precast detailing. Spacious floorplans include three-, four- and five-bedroom layouts with large living spaces, gourmet kitchens and spa-inspired bathrooms. Standard finishes include contemporary kitchen cabinetry with a convenient bank of drawers, ceramic tile, hardwood floors throughout main living areas and 35oz broadloom carpet in bedrooms. To get a closer look at the fine finishes and bright interior spaces, take a virtual tour of the model home here.

3. Mirabella Condos

Developer(s): Diamante Development Corporation
Location: 1926 Lake Shore Boulevard West, Toronto
Priced from: $550,000

Located along Lake Shore Boulevard West, directly across from Sir Casimir Gzowski Park and the shores of Lake Ontario, Mirabella Condos presents new homebuyers with the opportunity of lakeside living in the city. The two-tower condominium by Diamante Development Corporation features a design by Scott Shields Architects that features a classic limestone look, timeless proportions and tapered columns. Accents of bay windows and expansive glass balconies add interest to its facade, while simultaneously allowing for stunning lake and city views.

The collection of suites at Mirabella offer something for everyone, with functional floorplans, well-sized balconies and up to three bedrooms. The open-concept living spaces flow seamlessly from room to room, and feature an abundance of natural light. State-of-the-art finishes and features include premium kitchen countertops and stainless steel appliances. Plus, residents have access to luxurious amenities like a 24-hour concierge, indoor pool with an unobstructed view of the lake and a fully-equipped exercise room with views of High Park. With construction well underway, the onsite presentation centre and model suite have been removed, but prospective homebuyers can view a virtual tour of the space here.

4. One Bloor

Developer(s): Great Gulf
Location: 1 Bloor St. East, Toronto
Priced from: $5,409,990

One Bloor is a 75-storey condominium that combines striking architecture by Hariri Pontarini Architects, sleek interiors by Cecconi Simone and one of Toronto’s most iconic addresses. The development by Great Gulf was completed in 2017 and has become one of the tallest residences in the city. Amenities include 24-hour concierge service, outdoor terrace and sculpture garden, party lounge and state-of-the-art fitness.

Although the development is nearly sold out, there are still a handful of exquisite penthouses available for sale. These stunning spaces boast expansive layouts lined with the finest features and finishes and offer endless views of the city. Whether you’re in the market for one of these luxury penthouses or just want a peek at what they look like, you can take a cinematic virtual tour of one of them here.

5. Observatory Hill

Developer(s): Regal Crest Homes
Location: Hillsview Drive, Richmond Hill
Priced from: $1,393,000

Situated within the protected green space around the renowned David Dunlop Observatory, Observatory Hill is a master-planned community by several developers, including Aspen Ridge Homes, The Conservatory Group, CountryWide Homes and Regal Crest Homes.

Regal Crest Homes features a collection 36-, 45- and 50-foot singles and 27-foot semis, and offers a 3D virtual tour of its model home. For a more immersive experience, the tour is available on Google Cardboard which allows you to virtually step into the home using your smartphone. Check it out here.

6. The Thornhill

Developer(s): The Daniels Corporation and Baif Developments
Location: 2 Beverley Glen Boulevard, Vaughan
Priced from: $400,000’s

The Daniels Corporation has been in business for over 35 years and has built more than 30,000 homes, apartments, retail spaces and master-planned communities throughout southwestern Ontario. The developer is known for embarking on major projects like the Regent Park redevelopment, as well as launching unique initiatives like Daniels FirstHome™ program for first-time homebuyers.

It’s also one of the only developers in the region that offers new condo suites specifically designed for residents using mobility devices. Called the Accessibility Designed Program (ADP), the initiative is available in many Daniels communities including The Thornhill, a 308-unit residence now selling in Vaughan. The ADP features enhanced units that exceed the Ontario Building Code’s (OBC) requirements and include under sink clearance, roll-out/low-threshold balconies and a large roll-in shower, at no extra cost.

7. New Kleinburg

Developer: Paradise Developments
Location: Huntington Road & Mactier Dr, Vaughan
Priced from: $700,000s

With a picturesque village setting as its backdrop, New Kleinburg is a sought-after master-planned community by a team of developers that includes Paradise Developments. It offers the best of both worlds with serene parks and green spaces nearby, along with urban conveniences like shops, services and restaurants.

Priced from the $700,000s, Paradise Developments offers a collection of townhomes and singles with elegant architecture that takes cues from classic Georgian and Victorian-style homes. Exteriors boast thoughtful details like grand double-door entryways, carriage-style garage doors, black-trimmed windows with horizontal grill patterns, tumble-finish stone and English-inspired brick cladding.

Interior spaces are even more impressive with bright, open-concept layouts that lead to formal dining rooms, great rooms with coffered ceilings, and spa-like master ensuites. To get a closer look, Paradise offers a video walk-through of three homes, including two singles and a townhome model here.

8. Frenchman’s Bay

Frenchman’s Bay is a new low-rise community of townhomes and singles near Pickering’s sought-after waterfront. The development by Madison Group launched the final release of homes last month and simultaneously opened three new fully-decorated model homes.

The Wharf also features 659 square feet of finished basement space, complete with a rec room and full bathroom. The open-concept main floor offers direct access to a two-car garage, nine-foot ceilings, stained oak veneer staircase, and a cozy gas fireplace in the family room. The gourmet kitchen is both stylish and functional. Purchasers have the option to choose between a pantry or extended island. Upstairs are four generously-sized bedrooms, a convenient laundry room, and a sprawling master retreat with two walk-in closets and a luxurious ensuite.

On any regular day, jumping through the hoops of closing a real estate transaction can be a handful — there’s paperwork to sign, lawyers to meet with, and mortgage appraisals to be had. Like many other aspects of the Canadian real estate industry, and our daily lives, COVID-19 has thrown the typical process of closing deals out the window.

“Things that we used to take for granted before, so for example, having to meet with a lawyer to sign paperwork, is no longer even a possibility,” said Reuven Gorsht, co-founder and CEO of Deeded, a tech company that specializes in supporting and digitizing the real estate closing process. Deeded provides secure signing, document and closing support to clients through its online assistant platform.

To comply with newly implemented social distancing standards, which restricts the amount of face-to-face interaction transactions typically require, some closing processes have been adapted or moved online. By making property closings paperless and completely functional through new technology, Deeded is helping ease this transition.

According to data from the Canadian Real Estate Association (CREA), over 88,000 homes were sold in Canada in the first two months of 2020. With two parties on all transactions, this means that roughly 176,000 individuals and families are expected to close on a property in the coming weeks and months. While real estate, land registry and legal services have been deemed an essential service and remain open in Ontario, the COVID-19 pandemic is still making the closing process fraught with uncertainty.

“Residential closings involve a lot of different pieces coming together, and that could be anything from mortgage, to the availability of lenders, the appraiser, the appraisals, the availability of law firms and lawyers being open, [and] land registry,” said Gorsht. “Things literally keep changing by the minute.”

Job loss and fear over temporary unemployment related to COVID-19 has hit Canadian households hard during the last few weeks. In mid-March, the federal government received 500,000 applications for employment insurance benefits. As Gorsht explained, for those buyers and sellers who have made mortgage commitments, a sudden job loss may throw the mortgage lender’s ability to honour that commitment into question. In some transactions, lenders may include additional conditions requiring reverification of employment, which Gorsht said has been a cause of concern for some clients trying to close.

“Of course, that changes everything and that throws a lot of deals into a state where clients have a very high level of anxiety and want to close a lot faster and want to move up their closing dates, so we’re seeing that,” he said.

Even in the event of a COVID-19-related job loss, or other extraordinary circumstances that impact the buyer or seller, existing deals must still close, explained Gorsht. Standard real estate agreements in Ontario do not include a force majeure clause, a provision that would relieve both parties from obligations in a contract in light of an unforeseen event that stops the parties from fulfilling their contractual responsibilities. Other delays such as self-isolation, Gorsht explained, have an influence on the entire closing process.

“Let’s say you’ve got folks that are quarantined and they’re not able to sign anything, it now impacts everybody else,” he said. “It impacts if they’re selling, then you’ve got their buyer expecting to move in, and, of course, it impacts the buyer’s ability because they’ve probably sold their place as well, or notified their landlord.”

For those buyers and sellers who aren’t currently required to close, but are looking to make a sale, there may be actions they can take to gain more control over their future transaction. Gorsht said some lawyers have suggested including a COVID-19-specific clause in new contracts to cover any unforeseen situations arising as a result of the disease.

“There are a bunch of clauses being employed to be able to prevent future deals from delay,” he said.

Closing on a real estate transaction traditionally involves in-person meetings and signings, but in an era of strict social distancing, there’s no business as usual. One Deeded client who recently closed on a property is a nurse; as an essential medical worker, signing in person is not an option. To accommodate remote closings, regulatory and licensing bodies like the Law Society of Ontario (LSO) have changed their processes on how transactions can legally be completed.

For example, the LSO recently altered their interpretation of the Commissioners for Taking Affidavits Act, which normally requires that “every oath and declaration shall be taken by the deponent in the presence of the commissioner or notary public,” according to the LSO’s website. Now, lawyers and paralegals are not required to be physically present, and alternative means of commissioning are accepted, such as video meetings.

While technologies that support virtual showings, video-walkthroughs and e-signatures have existed for some time, Gorsht said that they are shining in this time of social distancing and widespread business shutdowns. Digital identity authentication has improved and online conferencing has made remote signings possible. Another Deeded client who couldn’t make it back in time from Latin America was able to close on a property via video.

“Now, technology has come such a long way, especially over the last few years where we’ve got digital identity technologies that are able to do a much better job than you can physically identifying your driver’s license on whether that is a legitimate document or whether it’s active,” said Gorsht.

While we aren’t certain what a post-COVID-19 world will look like yet, Gorsht believes that some of the virtual changes being deployed across the real estate industry will become permanent fixtures.

“Now that people are actually experiencing this new technology and being able to do things remotely, those behaviours, I believe, will stick,” said Gorsht. “We’re going to see such a massive change in the way that people are transacting on real estate.”

Two of the Toronto region’s foremost authorities on the housing market are readying updates to their 2020 forecasts as the COVID-19 pandemic casts a long shadow on home buying activity and early impacts on purchaser behaviour are becoming increasingly apparent.

Altus Group, which tracks sales, pricing and construction in Toronto’s new home market, had projected a strong year for sorely needed home construction in the region. The massive social and economic disruption caused by COVID-19 has, of course, led the firm to work toward revising its forecast for 2020 and 2021.

The problem with preparing a new forecast, as Altus Group Executive Vice-President Patricia Arsenault articulated in a special report published in March, is that it remains unclear how long and severe the disruption to the market will be.

Arsenault said that early May will be Altus Group’s target date for releasing an updated home construction forecast for the Toronto region. The longer timeline should allow her team to gather enough data to make confident projections and allow more time to pass to evaluate the severity of the disruption.

In the meantime, she provided an early look at a range of possible scenarios, including a worst case that assumes a prolonged disruption comparable to the 2008-2009 global financial crisis that would see home construction decline 28 percent compared to 2019 levels.

Arsenault’s best case scenario “acknowledges that housing starts in 2020 would, other things being equal, largely reflect sales – ‘demand’ ‐ that has already occurred, given the limited extent of speculative building and inherent sales to start lags. But it also assumes that the construction industry is only slightly impacted by labour and/or material shortages or full site shutdowns.”

For those looking for an update that’s expected to arrive earlier, the Toronto Regional Real Estate Board (TRREB) said late last week that it would be working towards publishing a revised sales and pricing outlook for the region’s resale market by mid-April.

TRREB, which recently published its Toronto market data for March, also provided some “preliminary market outlook guidance” ahead of preparing the more robust update to its 2020 forecast for the region. Like Altus Group, the board is waiting on the availability of more data on the impact of the social distancing measures as well as the Toronto region’s economic growth and employment picture.

In its preliminary COVID-19 update, TRREB said if infections peak in the spring and strict social distancing measures are subsequently relaxed through the summer then market demand should rise in the fall and winter.

“Extremely” low mortgage rates and the return of previously furloughed employees to the workplace should be supportive of a recovery in home sales, TRREB said.

Data released earlier this month by the Toronto Regional Real Estate Board (TRREB) gave us the first glimpse of the huge blow the COVID-19 pandemic would deliver to the city’s housing market.

After a strong showing in the first half of March, Toronto home sales fell 16 percent in the second half of the month when compared to the same period in 2019. While the market still emerged from March with sales up 12 percent over the previous year, it was a far cry from the momentum achieved in February when sales rose 44 percent over 2019.

“Uncertainty surrounding the outbreak’s impact on the broader economy and the onset of the necessary social distancing measures resulted in the decline in sales since March 15,” said TRREB President Michael Collins, in a media release.

There’s no doubt that market activity will fall much further and April’s results will paint an even bleaker picture of the state of Toronto housing after a full month spent weighed down by the pandemic.

But as market activity takes a big hit from the restrictive measures implemented to fight the virus’s spread, RBC Senior Economist Robert Hogue believes that Toronto home prices are relatively safe from a significant decline.

In a brief published in response to last month’s TRREB data, Hogue noted that the MLS price index for Toronto still increased 11.1 percent year-over-year in March.

“We expect price support to wear down in the weeks ahead. Still we see a low risk of a collapse at this point,” he said.

“We believe the extraordinary policy response from all levels of government and the Bank of Canada, as well as accommodating measures offered by financial institutions will soften the blow.”

TRREB’s own market analysis team took a similar view when providing a preliminary evaluation of the disruptive effects of the pandemic on the region’s housing market.

“As we move through the spring, it is possible that we may see a moderation in price growth if market conditions soften due to a combination of slower sales and an uptick in listings,” TRREB said in a media release accompanying the March market data.

“However, a resumption of tighter market conditions and an improving pace of price growth will likely occur as the market recovers in the fall of 2020 and winter of 2021.”

TRREB is set to release an updated Toronto housing market outlook for 2020 in mid-April once it completes a full assessment of the impacts of the pandemic.

While the COVID-19 outbreak is expected to slow spring homebuying activity, many real estate professionals are hopeful that the market will rebound later in the year.

The majority of respondents to a survey by the National Association of Realtors said they believed that buyers and sellers would return to the market as delayed transactions after the outbreak ends. Fifty-nine percent said that buyers are delaying home purchases for a couple of months, while 57% said that sellers were delaying sales for a couple of months.

“Home sales will decline this spring season because of unique economic and social consequences resulting from the coronavirus outbreak, but much of the activity looks to reappear later in the year,” said Lawrence Yun, NAR chief economist. “Home prices will remain stable because of a pandemic-induced reduction in inventory coupled with less immediate concerns over foreclosures.”

Other findings of the NAR survey include:

  • 90% of respondents said that buyer interest declined due to the outbreak, and 80% cited a decline in the number of homes on the market
  • Home prices are expected to hold steady after a robust rise prior to the pandemic. Seventy-two percent of respondents said that sellers have not reduced their process to attract buyers. However, 63% said buyers were expecting prices to decline due to less competition in the current environment
  • While residential tenants are struggling to pay rent, 46% of property managers reported being able to accommodate tenants who couldn’t pay, and 27% of individual landlords said the same