Posts

It was an “exceptionally busy” February for new home sales before the coronavirus slammed into the Toronto region just weeks later.

Data released today by the Building Industry and Land Development Association (BILD) and its source for home sales and price tracking, Altus Group, showcased several examples of a market heating up for a busy spring homebuying season.

Altus Group recorded 4,665 new home sales in the Toronto region last month, up 211 percent from the previous year and 57 percent higher than the 10-year average for February. The new home sales tally meant that it was almost the market’s best performance in February since 2002 and the third-best in 40 years.

“Prior to the uncertainty due to the COVID-19 situation, the new home sector in the GTA was on track for a strong sales performance in 2020,” said Patricia Arsenault, Altus Group’s Executive Vice-President, Data Solutions, in a media release.

“Low mortgage rates were triggering the release of pent-up demand that had been building on the back of strong employment and population growth, which helped boost February sales,” she continued.

Within the February sales total, single-family homes, which include detached, semi-detached and townhouses, saw 2,247 sales during the month, up 228 percent over the previous year and good enough to make it the strongest result since 2004. New condo sales totaled 2,418 for the month, up 197 percent from February 2019. This marked the second-highest new condo sales total recorded in 40 years, behind only February 2017.

On the pricing side, new condos rose to an average benchmark price of $961,268, up 21.3 percent year-over-year. Meantime, single-family home prices were down 2.2 percent to $1,097,987 over February 2019.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President and CEO, in a statement.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand,” he added.

Home construction and an array of real estate services were deemed “essential” earlier this week by the Ontario government and thus permitted to operate during the business shutdown order.

The Greater Toronto Area saw its strongest February since 2004 in terms of new single-family home sales, according to the Building Industry and Land Development Association.

Citing data from Altus Group, BILD said that the region had 2,247 new single-family home transactions last month. This was a remarkable 228% higher on an annual basis, and exceeded the market’s 10-year average by 44%.

Meanwhile, new condominium apartment sales were at 2,418 deals closed, up by 197% year-over-year and 48% above the 10-year average. Overall sales activity of new homes in the GTA for February 2020 was at 4,665 transactions, 211% greater annually and 57% higher than the 10-year average.

“Prior to the uncertainty due to the COVID-19 situation, the new home sector in the GTA was on track for a strong sales performance in 2020,” Altus Group executive vice president for data solutions Patricia Arsenault said. “Low mortgage rates were triggering the release of pent-up demand that had been building on the back of strong employment and population growth, which helped boost February sales.”

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” BILD president and CEO David Wilkes added. “We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

While February may feel like it took place years ago, given the daily coronavirus updates the city, province, and country are providing, it was fewer than just four weeks ago. And it was still on fire from a real estate perspective.

According to a new report from the Building Industry and Land Development Association (BILD), February was a record month for new home sales.

This has provided a staggering set of statistics for new home sales figures in February.

New Home Sales
A total of 4,665 new home sales were made in February 2020.

Fast stats:

  • 211% increase over February 2019
  • 57% above 10-year average
  • highest number of new homes sold in February since 2002

third highest February in past 40 years
New Single-Family Homes Sold
A total of 2,247 new single-family homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) were sold in February 2020.

Fast stats:

  • 228% increase over February 2019
  • 44% above 10-year average

New Condos, Stacked Townhouses and Lofts Sold
A total of 2,418 new condos, including units in low, medium and high-rise buildings, stacked townhouses and loft units were sold in February 2020.

Fast stats:

  • 197% increase over February 2019
  • 48% above 10-year average
  • Second strongest February in 40 years for new condo sales (after 2017)

Of course, this shouldn’t come as a huge surprise. Before the economy came to a jarring halt earlier in March, Toronto’s, and the rest of the GTA’s, housing market was off to a red-hot start reminiscent of 2017.

Only this week, are we starting to see some course correction take place, and sales starting to slow down.

However, February did set a new benchmark price point for new condo apartments at $961,268, up 21.3% over the last 12 months. The benchmark price for new single-family homes, however, dropped 2.2% over the past 12 months to $1,097,987.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President & CEO.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

It should come as no surprise that the recent coronavirus pandemic will have an effect on the real estate and housing market. Even one as hot as the GTA’s has been in recent months and years.

According to most, we’ve never seen anything like this – not even during the 2008 financial crisis.

So we asked Shaun Hildebrand, President of Urbanation, for his insights into what the COVID-19 crisis will likely bring to the condo market in 2020. And while we’re only now starting to see the first signs of bringing a large part of the global economy to a grinding halt, these repercussions will likely continue to play out over the coming months and year(s).

Here’s what Hildebrand sees for the GTA condo market in the wake of the coronavirus pandemic.

Slowing Down
The heightened uncertainty and physical distancing measures being encouraged across Canada right now will lead to a slower market for new condominium developments in Toronto and the GTA.

As buying a new condo requires strong confidence that the market will appreciate and the economy will remain stable, since units may not complete construction for up to 5 years, demand will scale back significantly – the extent to which this occurs will depend on how deep and long the current macro downturn becomes.

Spring Launches
From a functional standpoint, many developments have either closed their sales offices, limited their hours or have moved to a virtual environment. I expect most of the projects that were anticipated to launch this spring will be delayed until conditions improve – the first signs of which will appear in the resale market, which could take at least six months to materialize in the data. While some smaller scale projects that cater more to end-users may launch in the coming months, which would look to attract buyers in areas with more secure employment, I would expect larger-scale, investor-driven projects to hold-off coming to market for a while. Suffice it to say, new condo sales volumes and construction starts will be down quite a bit this year.

Prices, Developers, and Buyers
Condo developers are in a good position as the units in development are almost entirely pre-sold and the market was exceptionally tight leading into this. The robust market stimulus and support initiatives from the government and Bank of Canada should also combine with low inventories to help continue supporting prices. It seems more likely at this point that prices will pause rather than experience a noteworthy decline as buyers and developers mutually disengage for the most part. Low borrowing rates, support for lenders and borrowers and fiscal aid will put the market in a good position for an eventual return to growth. When and to what degree that happens depends on what happens to the economy and outlook in the coming months.

That said, unless construction sites are shutdown or become significantly delayed, a wave of condo completions will occur this year, most of which are pre-sold to investors and will end up in the rental market. This will combine with a shift in use of some short-term rentals (which can’t attract guests in this environment) to long-term leases to boost rental supply during a period when demand will fall due to a drop in in-migration and rise in unemployment.

I don’t think anyone is talking about the fact that the recent decision to close the Canadian borders will restrict a key engine of demand at a time when condo completions could reach new highs. International immigration and non-permanent residents totalled 150,000 in the Toronto CMA in 2018 and 2019, representing basically all of our population growth. Since most new international migrants rent, we were well positioned to absorb the nearly 33,000 condo and purpose-built rental completions scheduled for 2020. Not anymore, as I can’t imagine that population inflows return to previous levels until we have a vaccine (which by some estimates may take more than a year). This should lead to higher vacancy rates, which will also be pushed higher by rising unemployment.

So, after a strong escalation in recent years, condo rents are likely to experience at least some decline in 2020, providing a temporary relief valve for an historically tight market.

Condo Investors
Condo investors will be okay this year. Because units finished this year were bought four to five years ago and rates have dropped, calculated carrying costs (including mortgage with 25% down, condo fees, taxes and insurance) will be at least $100 a month less than current average rents in Toronto of $2,400. This provides some room for rents to adjust down more easily so the units can become occupied. But this obviously presents greater challenges for investors who will see their units come to completion in 2021 and beyond who will need much higher rents to cover carrying costs.

Rentals
Rents in Toronto were already flattening before this happened as the market began to show some resistance to high rents. Same-building annual condo rent growth in Q4-2019 was 1.8% – the slowest rate of increase in four years. I think we’re headed for vacancy rates this year that rise above 3-4% for the first time since 2009 and condo rents that could decline by up to 5% (which is significant as rents are notoriously sticky).

But this will be temporary.

As fundamentals eventually recover, low structural vacancy rates will resume and rent growth will pick up again. In other words, while Toronto is still under-building rentals, it won’t feel like it this year. The impact on the purpose-built rental market will be more minimal, as the market is mostly comprised of older buildings characterized by low turnover and more affordable rents.

This is a time for all Ontarians to pull together, and we’ve seen this happening in communities right across our province.

But I know people are anxious, wondering how they will pay their April rent in just a few days, and landlords are wondering how they will keep the lights on if rents aren’t paid.

Our government has been clear from Day One — we will ensure renters can stay in their homes during this challenging time.

That’s why we acted quickly to prevent evictions. Tenants who can pay their rent must do so, to the best of their abilities. But I want to be very clear — you cannot be forced to leave your home if you cannot pay your rent on April 1. Period.

Today, I’m calling on landlords to be as flexible as possible when it comes to collecting rent, starting with April, at a time when many people are struggling. The same goes for any planned rent increases landlords are contemplating, whether already approved by the Landlord and Tenant Board or not.

Of course, some landlords are also facing challenges, especially small landlords. While mortgage deferrals are available, some of you are waiting for news from your bank. Everyone needs to do their part right now.

To the tenants out there who are having challenges paying rent, please speak to your landlord about whether it can be postponed or if other payment arrangements can be agreed to. And landlords, please be as flexible as you can. We need to come together as Ontarians and support each other.

This week, our government and the federal government both announced a range of measures that will help everyday people, including reducing Ontario electricity rates and a federal taxable benefit of $2,000 a month for up to four months for eligible workers who have lost wages.

Our government has also committed $200 million to help vulnerable people through existing programs and $52 million of this will flow directly to those in financial crisis who can’t access federal assistance. This will help cover basic needs like rent, food, medicine, transportation and other services.

We are working closely with all levels of government, and will continue to do everything we can and will consider all available options in order to help the people of Ontario get through these difficult and uncertain times.

As the economic impact of the COVID-19 pandemic ripples across Canada, another wave may crest within the week as rent comes due for residential tenants.

April 1 is a pressing deadline for tenants and landlords alike as the novel coronavirus keeps people at home and closes businesses, leaving tens of thousands of Canadians out of work.

“It reminds me of a ‘Mission: Impossible’ movie, where tick, tick, tick, the time is ticking down and someone has to try to save the day before everything explodes,” said William Blake, a landlord who spoke Tuesday on behalf of the Ontario Landlords Association. “This is how a lot of tenants and landlords feel about this April 1 rent deadline coming up.”

Advocacy groups for both landlords and tenants are calling on the federal and provincial governments to offer some kind of relief before April 1.

Geordie Dent, the executive director of Toronto’s Federation of Metro Tenants Associations, said tenant associations across the country plan on issuing a joint statement Wednesday morning asking for government help to address an unprecedented rental housing crisis.

“Tenants have basically had the legs cut out from under them,” said Dent, noting employment insurance applications are even higher than during the 2008 financial crisis.

On Tuesday, Manitoba’s government suspended any rent increases starting April 1 in response to the economic fallout from COVID-19.

The province joined others including Ontario, Quebec and Prince Edward Island in halting all non-urgent hearings before their landlord-tenant tribunals, effectively banning any evictions resulting from non-payment of rent.

But other provinces and territories have moved to teleconference hearings, with Saskatchewan’s Office of Residential Tenancies noting on its website that rents are still due.

Grassroots movements have sprung up in several cities in the past two weeks, calling on tenants to withhold their rent payments — either out of necessity or in solidarity with those who can’t make ends meet.

“We definitely agree that the government should be making a rent freeze and finding ways to support low-income people. But for now, we’re focusing on just organizing amongst ourselves because we can’t really wait,” said Paterson Hodgson, a spokesperson for a Toronto-based neighbourhood group calling on tenants to go on rent strike.

Dent recommends that any tenant worried about making their rent on April 1 should first check to see what steps their province or territory has taken in regards to tribunals.

“You don’t want to see people prioritizing their landlord’s mortgage payments over their ability to feed themselves and their families,” said Dent.

Prime Minister Justin Trudeau said Monday that federal officials are looking at ways to get money to community housing providers and the nation’s renters.

Another government source, who was not authorized to detail behind-the-scenes talks, said there is an ongoing push with at least six provinces to sign up for a new rent supplement to avoid evictions for hundreds of thousands of renters.

Blake, who owns small rental properties in Ontario, Alberta, British Columbia and Nova Scotia, said he sympathizes with his tenants and doesn’t want to have to evict any. But he said banning evictions or going about business as usual are just delaying an inevitable wave of evictions as landlords will eventually need the money to pay taxes, mortgages and maintenance fees.

“What we’re pushing for, and we were hoping the tenant groups across Canada would be pushing for, is for the government to give tenants … something like student loans, where you’re in trouble, you need a loan, you can get it to pay your rent,” said Blake, who pointed to the City of Toronto’s rent banks as a model example.

Landlords “don’t want government handouts. We only want the legal system that we use to continue to be efficient and run and operate, which means that the tenants pay rent,” he said.

The Bank of Canada slashed interest rates for a third time in a matter of weeks and announced plans to acquire more commercial paper and government securities to help shield the nation’s economy from coronavirus fallout.

The central bank lowered its policy rate Friday by another half a percentage point to 0.25 per cent, adding in a statement that the unscheduled rate decision brings the rate down to its effective lower bound. The Bank of Canada last cut rates to these levels in 2009, during the global financial crisis.

The move was necessitated by quickly deteriorating conditions, including a flood of new jobless claims last week, that suggest the economy is poised to produce one of the sharpest drops in economic activity in history.

Policy makers led by Governor Stephen Poloz announced two new programs: the Commercial Paper Purchase Program and the buying of Canadian government securities in the secondary market. The government securities purchases will begin with a minimum of $5 billion per week, across the yield curve, the bank said in its statement.

As the spreading coronavirus outbreak paralyzes economies globally, the energy-heavy Canadian economy is also having to contend with the crash in oil prices — prompting a steady drumbeat of recession calls.

The move by the central bank is part of a wave of policy rate cuts and brings Canada’s benchmark rate closer to most other advanced industrialized economies. The Bank of Canada has now lowered interest rates three times this month, with a cumulative easing of 1.5 percentage points.

The Federal Reserve has also cut by 150 basis points this month. In addition to lowering borrowing costs, the central bank has also announced in recent days a slew of new liquidity measures to inject cash into the banking system and money markets and to ensure it can handle any market-wide stresses in the financial system.

The Canada Mortgage and Housing Corporation is expanding the number of insured mortgages it is willing to buy from banks to give the banks more freedom to lend out more money to consumers and businesses and keep the economy humming.

The taxpayer-funded agency, which backstops the vast majority of Canada’s housing market by insuring the loans that finance them, announced earlier this month it was willing to take up to $50 billion worth of loans off of banks’ books.

On Thursday, the CMHC announced it would expand that mortgage-buying program to $150 billion.

“This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses,” the agency said in a statement.

Moving loans from banks to the CMHC helps the banks’ books and allows them to free up cash that they can lend out to consumers and businesses while the COVID-19 pandemic is hitting them hard and threatening the overall economy.

Canada’s big banks have promised interest rate relief for up to six months to Canadian borrowers struggling to make their payments, but the CBC has reported that the fine print of those programs make it so that the deferred interest must be paid back at some point, which makes the loan longer and more expensive.

Banks flooded by requests for mortgage relief
Canada’s big banks are being flooded by requests for payment relief by borrowers — to the tune of 213,000 requests so far, Bloomberg reported Thursday.

The head of the CMHC, Evan Siddall, is asking mortgage holders to not overload the system in order to make sure any relief goes to those who need it most.

In terms of the agency’s mortgage-buying program, CMHC says all of the pools of mortgages that would be transferred are already insured by the government anyway, so there’s no additional risk to taxpayers from the transaction.

To say the events of the past few months have had an unprecedented impact on how our society functions would be an understatement. As the threat of the COVID-19 global pandemic grows across Canada and all levels of government enact policies to stop community spread via social isolation, millions of Canadians in the non-essential workforce are now working from home and abstaining from visiting businesses and other public places.

These efforts to “flatten the curve” are paramount to keeping high-risk citizens safe and preventing our health care system from being overwhelmed. But they’re also having a profound impact on industries that rely on in-person interactions, like restaurants and hair salons. They’ve also led to fears of a global recession and limited purchasing power for consumers when the risk of the coronavirus subsides.

The real estate industry, in particular, is a prime example of one that will need to drastically adapt if it’s to be “business as usual.” While brokerages and real estate agents have been deemed “essential services” by the Ontario government, there have been some key changes to the way agents must operate—and it remains unclear how the market will perform as the pandemic evolves.

What can buyers and sellers expect from the market during these uncertain times? Let’s take a look at what could occur in the short- and long-term.

In the short term
A cooler spring than expected
Before COVID-19 was declared a pandemic by the World Health Organization on March 11, the spring real estate market was set for a record-breaking sales season, especially in Canada’s largest cities. The Canadian Real Estate Association revealed the month of February was particularly hot for year-over-year sales, which rose 27% nationwide, indicating the busy spring buying season had started early. Similar performance was recorded for Toronto and Vancouver homes for sale; transactions rose 45.6% and 44.9% year over year in those cities, respectively. As well, a lack of new properties on the market was a prevalent theme in major urban centres, putting the squeeze on buyers, and leading to tight sellers’ market conditions.

Despite this strong start, however, we can now expect to see market activity slow down, as buyers and sellers may reach a stalemate. Buyers may decide to hold off on their home purchase amid uncertain health and economic conditions, while sellers—having seen what others got for their properties in the late winter months—may be hesitant to accept a lower offer today.

However, there are still those who need to buy and sell right now, such as those who have already sold their homes and are on a time crunch to buy a new one. These “highly motivated” buyers and sellers include people who need to relocate for work, are going through a divorce, or need to downsize or upsize quickly.

As well, buyers may be hesitant to take the plunge on a home purchase at a time when employment and income circumstances could change rapidly; they may be wary of lost savings in the face of the financial market downturn, or fear becoming unemployed in the near term, which would jeopardize their ability to secure mortgage financing for their home.

Overall, those who don’t have urgent real estate needs will most likely stay on the sidelines for now, as the situation evolves.

Agents need to find creative alternatives to face-to-face service
In the age of social distancing, one of the most obvious challenges for real estate agents is showing homes listed for sale to prospective buyers, as everyone is wary of the public health risks showings pose, and wants to minimize in-person contact.

Most real estate bodies are also calling for a cease in open houses and showings; for instance, the Real Estate Council of Ontario has released a strong recommendation for agents to hold virtual showings instead, and cancel all planned in-person events. The Toronto Regional Real Estate Board has also suppressed open houses on Stratus MLS and their public-facing site for all GTA and Toronto real estate listings, and will not be enforcing the requirement to show a home while current government health advisories remain in effect. (Prior to the COVID-19 pandemic, listings that were not available for showings or inspections could be suspended.)

In the long term
The market will bounce back
It’s hard to predict how long COVID-19 will continue to be a threat, along with its impacts on individuals, businesses and the market.

For example, while the circumstances are wildly different, the last time the Ontario real estate market witnessed a buyer-seller stalemate was in the spring of 2017, when the former provincial government introduced the Fair Housing Plan, a package of measures that included a foreign buyers’ tax for the Greater Toronto Area, and new rent controls. While the measures themselves didn’t hinder buyers’ financial capacity, they caused a “psychological” cooldown in the market, as no one wanted to participate in a real estate transaction amid uncertain times. The effects of that cooldown lasted into the second half of 2019, before home sales and prices started showing notable year-over-year increases once again.

However, the reality is that the fundamentals of the market, particularly in the GTA and other major urban centres, don’t change; pent-up buyer demand has been slowing building as the supply of available homes for sale remains scant. Due to the limited inventory available, combined with the population growth in Ontario’s big cities like Toronto, we can expect market activity to resume and recover quickly once we’ve mitigated the health risks from COVID-19 and the financial markets stabilize.

That being said, as people react and adapt to ongoing directives from municipal, provincial and federal governments, we can expect real estate sales to be impacted.

Almost a year after two adjacent proposals on Eglinton west of Yonge in Midtown Toronto were integrated into a single plan, the proposed two-tower complex at 50 through 90 Eglinton Avenue West has been submitted for Site Plan Approval (SPA) to City staff. The proposal from developer Madison Group has advanced to this stage of the planning process following the Local Planning Appeal Tribunal’s August, 2019 approval in principle of rezoning for the site’s east tower.

Hariri Pontarini Architects serves as design architect, Turner Fleischer Architects is Architect of Record, and ERA Architects act as heritage consultants on the project. Renderings paint a largely unchanged picture since the last submission, incorporating minor revisions to the height, as well as some more subtle changes within.

The plan still calls for a 32-storey east tower, but the west tower now has 26 storeys, increasing by two from the previous submission. The new heights would reach 111.6 m / 366 ft and 93.1 m / 305.4 ft, both increasing less than one metre taller that the previous application’s heights.

Like previous versions, a primary feature in the complex’s street-level experience is the partial retention of the east and south facades of a 1920-built Toronto Hydro building at 50 Eglinton West. One notable change to the retention and modification of its facades is the deletion of a proposed 3.0 metre-wide, double-height colonnade, now replaced by glazed openings in the east facade of the Hydro Building.

A total gross floor area of 44,337.9 m² is proposed, with 37,237.4 m², or 83.9% of the building, dedicated to residential floor area within the towers and an amenity level on the fourth floor of the podium. Retail would take up 2,918.4 m² on the first two floors, and office space would count for 4,182.1 m² on levels two and three, taking up the remaining podium space.

The updated plan’s towers call for a combined 534 condominium units, an increase from the 512 in the 2019 application, with 242 units in the west tower and 292 in the east tower. These are now proposed in a mix of 252 one-bedrooms, 253 two-bedrooms, and 29 three-bedrooms, an unusually high proportion of multi-bedroom units.

Parking for the complex would be housed within a three-level underground garage with 224 spaces, 163 for long-term resident use, and 61 spaces shared between visitors, retail, and office users. 575 bicycle parking spaces would also be included.

February was a stellar month for new condo sales in the populous region immediately west of Toronto. But with the COVID-19 pandemic disrupting every aspect of life in Canada, it is likely to be the last high-performing sales month for a while.

Peel Region saw 545 new condo sales last month, according to new home sales numbers released this week by the Building Industry and Land Development Association (BILD) and Altus Group.

This monthly total made for a 329 percent increase over the previous year and was well over the combined sales total for the past two Februaries. The region’s total was the second highest in the Greater Toronto Area and the strongest outside of the City of Toronto.

Nearly 1.5 million people reside in Peel, home to the cities of Mississauga and Brampton. Mississauga, the region’s largest municipality, has 5,157 condo units currently under construction across 36 developments, according to BuzzBuzzHome data. While its population exceeds 500,000, Brampton has fewer condo developments, with 257 units currently under construction across 10 projects.

Impressive as the new condo sales numbers are, the expectation is they will suffer a steep drop in March as the effects of the COVID-19 pandemic begin to weigh on market activity.

New home sales teams have been quick to adapt to the need for social distancing and harness technology that will allow them to continue to support sales during this period of panic and uncertainty. However, despite their best efforts, many condo launches are expected to be pushed back from the typically busy spring season.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President and CEO, in a statement accompanying the February sales data.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfill our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

 

The Bank of Canada (BoC) has made another unscheduled rate cut, slashing its Overnight Lending Rate by 50 basis points from 0.75% to 0.25% – the lowest it has been since April 2009 – as further response to the COVID-19 pandemic and its impact on the Canadian economy. It is the third rate cut the BoC has made in March, slicing a total of a percentage point from where it stood in February.

“The spread of COVID-19 is having serious consequences for Canadians and for the economy, as is the abrupt decline in world oil prices,” stated the BoC in a release. “The pandemic-driven contraction has prompted decisive fiscal policy action in Canada to support individuals and businesses and to minimize any permanent damage to the structure of the economy.”

A “Complimentary” Approach to Support Canadians
The BoC’s move today is meant to support the fiscal efforts of the federal government, which has been rolling out assistance programs for Canadians whose incomes have been impacted by COVID-19, either due to the need to self-isolate, job loss, or the need to stay home from work to provide childcare. By cutting interest rates, the BoC keeps the cost of borrowing low both for lenders and consumers, which helps keep the market liquid and spending moving during times of economic upheaval.

“The intent of our decision today is to support the financial system in its central role of providing credit in the economy, and to lay the foundation for the economy’s return to normalcy,” the BoC stated.

The BoC has also announced it will roll out two programs to keep funding flowing for small businesses and support overall economic recovery, by buying back Government of Canada bonds, securities, and other financial instruments.

Could More Interest Rate Cuts Be on the Way?
It appears the BoC may not be finished with its downward trajectory, strongly indicating that more cuts may come as the situation evolves. It will continue to closely monitor the economy in co-ordination with the other G7 banks. “Governing Council stands ready to take further action as required to support the Canadian economy and financial system and to keep inflation on target,” states its release. The move to cut has been made by central banks globally in efforts to shore up economies amid COVID-19, including the U.S. Federal Reserve, which slashed its own rate to near zero on March 16.

The BoC also stated it will release its full economic update in its next scheduled rate announcement, on April 15.

What Does This Mean for Mortgage Borrowers?
Think of the BoC’s Overnight Lending Rate as a benchmark – it is a basis used by consumer lenders, such as TD, RBC, etc. when setting their Prime Rate-priced products. This means whatever the BoC does will have a direct impact on variable-rate products, such as variable mortgages and lines of credit.

As a result, those with variable-rate mortgages will see either their monthly payments drop in tandem, or more of their payment going toward their principal debt and less towards interest.

Those currently locked into a fixed-rate mortgage term will not see their payments or interest rate affected by today’s announcement, though those getting a brand-new fixed-rate mortgage, or coming up to renewal or refinance, will likely have access to lower rates than compared to a month ago, as lenders take their cues for fixed-rate pricing from the bond market.

That’s because, in times of economic uncertainty, investor demand for “safe haven”investments such as government bonds, rises. That in turn causes bond yields to drop – they have an inverse relationship with investor demand, as the maturity payoff tends to be lower for low-risk investments. Investors are particularly drawn to bonds when the BoC’s rate is low, as it means whatever investments they purchase now will be at a discount, and unlikely to have their values lowered in the near future by a rate increase.

As of today, the Government of Canada five-year bond yield sits at 0.76% – a multi-year low.

In an emergency announcement today, Canada’s central bank cut its market-shaping overnight rate by 50 basis points to 0.25 percent in response to the coronavirus pandemic’s dramatic impact on the Canadian economy and financial system.

This move was the third rate cut in the span of a month and the second emergency announcement the Bank of Canada has made within two weeks. While the cut is technically viewed as an “emergency” measure since it falls outside the Bank’s regularly scheduled rate announcements, it came as no surprise to economists who had widely anticipated the move.

Just earlier this week, the RBC Economics team noted that while the Bank of Canada had been quick to respond to the coronavirus pandemic, additional measures would be necessary and a further rate cut was all but inevitable.

Today’s cut brings the overnight rate to a level that matches the depths of the financial crisis of 2008-2009, down from 1.25 percent after just a few short weeks. While the Bank is working on a number of initiatives to support the Canadian economy during these volatile times, experts believe this will be its final rate cut in response to the pandemic and it will stop short of slashing the rate into negative territory.

“[Bank of Canada] Governor Poloz views this as the effective lower bound and is not likely to employ negative rates that the Bank thinks are harmful to financial markets,” wrote Oxford Economics’ Tony Stillo.

“This extraordinary monetary stimulus, in tandem with a still growing number of fiscal measures, are an absolute necessity to help offset the worst-case impacts from the pandemic shock on the economy,” he added.

The Canadian housing market is expected to see a significant slowdown in activity in the coming months with the first signs of the pandemic’s impact anticipated to be visible in the March sales data from markets across the country. That being said, the diminished number of those who do purchase homes during this time will likely see historically low mortgage rates being offered by lenders.

“Think of the [Bank of Canada’s] Overnight Lending Rate as a benchmark – it is a basis used by consumer lenders, such as TD, RBC, etc. when setting their Prime Rate-priced products. This means whatever the BoC does will have a direct impact on variable-rate products, such as variable mortgages and lines of credit,” wrote Zoocasa’s Managing Editor Penelope Graham in a blog post.

“As a result, those with variable-rate mortgages will see either their monthly payments drop in tandem, or more of their payment going toward their principal debt and less towards interest.”

A real estate investment trust has alleged that RBC has used the COVID-19 coronavirus outbreak to acquire real estate assets at rock-bottom prices.

According to a Bloomberg report, a subsidiary of AG Mortgage Investment Trust Inc. claims that on March 23, RBC contacted it and said that the REIT’s mortgage-backed securities had seen a drastic decline in value due to the virus outbreak.

That meant the bank could require additional cash or securities. The REIT says that the valuations were not reflective of their true value.

The lawsuit says that RBC has not followed the actions of many other banks in not pursuing remedies against REITs.

The Bloomberg report cites a Wall Street Journal story that RBC has seized many commercial real estate debt seized from clients in recent days and will sell them to shore up finances.

RBC has not commented on the allegations, which have not been proven in court.

The case will be discussed Thursday in the federal court in Manhattan. The REIT is hoping for a block on RBC taking any actions on its assets.

The lawsuit states that selling the assets at auction “would not only dramatically and prejudicially underprice these securities to plaintiffs’ detriment, but would also likely precipitate a chain reaction of other banks being pressured to foreclose on other mREITs’ pledged securities, all at prices informed by the fire sale that defendants seek to hold.”

It’s an uncertain time for many. Amid the coronavirus crisis, borders have shut, flights have been downed and workplaces around the world are learning to adapt to empty desks as employees work from home. This week was so different from the last, and as new information flows in every minute, businesses have their eyes fixed on the market, attempting to predict what is still to come. It’s no different for Canada’s local real estate industry.

“Every hour is different. Last week, we sold two of our listings with bully offers well above list [price], every single property sold this year sold above list,” said Josie Stern, a sales representative with Sutton Group-Associated Realty’s Josie Stern Team. “In the last week, we thought this would be the last ‘hurrah’, because obviously [things] are changing, a changing world.”

Stern recently listed and sold a two-storey detached home in York’s Humewood community, 34 Kenwood Avenue. In excellent condition, with enough parking for three cars, and located a short walk from St. Clair Avenue West, the three-bedroom home didn’t last long on the market. Listed at $1,029,000, the property sold for $1,361,000 — $332,000 over asking — in less than a week after 71 showings and 10 offers, all of which were priced high.

“That area is still in very high demand,” said Stern. “It is getting more and more challenging getting people in the door, and so we have to adapt.”

A day after 34 Kenwood Avenue hit the market, listed on Tuesday, March 10th, the World Health Organization declared COVID-19 a global pandemic. Stern was still seeing a steady level of activity when she sold 34 Kentwood Avenue, following a prosperous level of sales that had been maintained since January. As of Monday, she says that the market hasn’t really changed, but the coming weeks could be a turning point as people are strongly encouraged to stay home and practice social distancing.

“Right now the market is in flux. We don’t really know what is happening or what is going on,” said Stern. “It’s as new to us as it is to everybody else. I guess you have to adapt to new ways of selling houses and condos with the people that have to move.”

As Stern explains, people still need to move, buy and sell homes. Social distancing places limitations on how real estate business is usually handled, through traditional methods like open houses and in-person offer presentations, but agents will have to change their ways.

“There are people who still want to go into the homes,” said Stern. “We’re very clear and very specific about social distancing, about using sanitisers, not to touch anything, keeping your distance, only one group at a time. But that limits you, so we are using a lot of electronic media.”

In addition to reaching out to her extensive network of buyers and sharing ideas with other professionals, Stern is also focused on keeping her clients calm and supported in their housing decisions during this time.

“The client obviously comes first, and trying to keep everyone healthy and adhere to social distancing. It’s a juggling act,” she said.

Across from Roy Thomson Hall, one-bedroom suites at Theatre Park sold for $568,000 and $590,000 in June and July respectively. Months passed before a similar model – this 450-square-foot unit – was again available for sale and 140 potential buyers toured the property prior to the scheduled offer night early December.

“I sold the exact same plan a few months before – listed it low, held back offers and had multiple offers – so I saw the demand for that size, price point and location,” agent Alex Moloney said of the unit that sold for $568,000 to one of eight bidders.

“[For this unit], just the amount of showings we had was an indication I could expect more offers than we had before. But I wasn’t expecting 17.”

About five years ago, Lamb Development Corp. constructed a 47-storey tower with ultra-modern suites, such as this one-bedroom unit with exposed concrete finishes and nine-foot ceilings, as well as walls of windows and sliding doors to a 132-square-foot terrace with a gas hookup.

Frosted sliding doors separate the bedroom from entertaining quarters outfitted with two-toned kitchen cabinetry, quartz counters and upscale appliances, including a gas stove.

Monthly fees of $292 are allocated for water, heating, 24-hour concierge and common area upkeep.

“The quality of finishes are higher end in terms of the appliances, kitchen and countertops, and the amenities in the building as well with the pool and gym,” Mr. Moloney said.

“And the location is one of the best things it has going for it because it’s right near the subway, and close to the Financial District and Theatre District.”

 

Now that banks in Canada have announced that they will allow homeowners to defer their mortgage payments for up to six months in light of the current novel coronavirus pandemic, tenants are wondering why they still have to keep up with rent payments in a time that is financially precarious for most.

The concern is especially pressing in Toronto, where rent is a shocking $2,500 per month on average and many tenants’ rent money helps landlords to pay off the mortgages they may now no longer have to make payments on.

Some find it a bit counterintuitive that those who have been lucky enough to have the financial means to purchase a house — an option unavailable to most of us, especially in Toronto’s market — are getting a break, while many renters in Canada live paycheque to paycheque (and many paycheques won’t be coming in during our current state of emergency).

A few are going as far as to call it class warfare — such as popular social media account parkdalelife, which aptly tweeted: “working class people will continue supporting a capitalist class that amasses wealth through income from capital during mass layoffs and a global pandemic.”

There is the fact that those who defer their mortgages will eventually have to pay them off in full, while it may be difficult for landlords to retrieve deferred rent later on from a tenant who, say, moves at the end of their current lease agreement.

Still, the situation does feel unfair, and people have pointed out that it may lead to further evictions and cases with the Ontario Landlord Tenant Board.

Before the mortgage news broke, more than 400,000 people had signed an online petition calling for both rent and mortgage payments to be cancelled for all Canadians during this unprecedented time.

Though it’s good to see that some change on this front was enacted to ease many residents’ financial burden, a huge portion of the population is still worrying about how they will make ends meet in the coming months.

Finding a stable, affordable and comfortable place to live is what Torontonians are after, Toronto’s Deputy Mayor Ana Bailão tells Toronto Storeys.

Bailão, who is also the city councillor of Ward 9, says “Housing affordability and affordable supply are the issues that concern Toronto residents the most.” And while Bailão says there isn’t a mandatory obligation for tech companies to create these options, she hopes that “tech companies will adopt a role in supporting the creation of affordable housing” working with the city and community.

Bailão points to investment, which tech companies can plug into the housing market to support the growth of the housing supply. Or tech companies could help build directly and explore new real estate strategies, creating places to house their workers after work too. After all, with investment also comes the ability to recruit high calibre talent to the city, and when they come they will require somewhere to live. But is it the responsibility of, say, Google or Microsoft, to handle employees’ housing situation in addition to delivering their paycheques?

According to the 2019 CBRE “Scoring Canadian Tech Talent” report, Toronto was the top ranked city when measuring tech availability to quality of labour to cost competitiveness, receiving an 88.1 percent score. Ottawa (73.1), Vancouver (71.4), Waterloo (69.4) and Montreal (69.3) rounded out the top five, with 20 Canadian cities evaluated.

The 2019 report states that across three cities – Toronto, Vancouver and Montreal – there’s been a 2.8 million sq. ft of new build pre-leasing carried out by tech firms. Also, Toronto and Vancouver have the lowest downtown vacancy rates in all of North America, according to CBRE, and the tech industry has accounted for 17.1 percent of office leasing activity since the beginning of 2018.

Many tech startups turn into profitable tech enterprises, and this can happen fast, so finding a space that also moulds to changing needs can be difficult for those with less cash flow than Google and Shopify, both of which have announced their plans for new office setups in the city, slated to open in 2022.

Tech companies have moved, and are continuing to move, into Toronto. They are shaking up how they do it too, now occupying full floors with varying operations throughout. Take Google’s multi-year deal with IWG Spaces (WeWork’s rival) this past fall, which will see the tech mammoth house 24,000 sq. ft of the Royal Bank Plaza downtown – so two floors dedicated to Google, held in the corporate plaza with neighbours like the Fairmont Hotel, and located directly in the city’s financial district.

Now that they are here, and as Toronto’s talent and output continues to grow all while Toronto’s low housing vacancy rate continues and people struggle to find and keep a livable home – should we be looking to tech firms to solve the housing crisis we have on our hands here? Could they help?

We asked four valuable sources to give us their take on tech and housing in Toronto, and if in fact “tech can help save Toronto” from its housing problem.

Featured are Toronto’s Deputy Mayor, Ana Bailão; Jason Mercer, chief market analyst for the Toronto Real Estate Board (TREB); Matt Daigle, founder and CEO of Rise, a business focused on sustainable home improvement; and Claire Buré, manager at MaRS Solutions Lab.

Below we touch on topics around housing supply, innovation, and emerging building technologies in the housing market. We also ask if there is a responsibility for lucrative tech businesses to invest in housing infrastructure for the communities they serve.

Ana Bailão , Deputy Mayor and City Councillor, Ward 9, Davenport
“Tech companies have been an integral part of our city’s prosperity and continued economic growth,” says Deputy Mayor Ana Bailão . However, Bailão also realizes that “some of the impact of the tech sector on the housing market is, of course, difficult to qualify.”

Bailão notes Sidewalk Labs’ proposal as an example of a technology firm seeking to participate directly in the housing market. “We need to work with tech companies to leverage our processes to ensure that affordable housing is a part of their considerations and a product of their prosperity in our city,” explains Bailão. But these developments also need to be made for and with the community, created for everyone who chooses to live here. And done safely.

Bailão says the public policy debate over whether or not there is a civic duty, or responsibility, of businesses to ensure that the people who choose to work in Toronto can actually live here, existed long before tech was around.

“I do think there is a responsibility to occupy a role” in making ‘livable’ happen, she says, “They are their employees after all.”

Bailão says there is “unquestionably” a role for tech companies moving forward; they should be part of the solution to housing challenges faced in this city. “However, not just tech companies but all larger employers and others” should be chipping in here too.

“It is entirely consistent that large pension funds, public or private, should be investing in the affordable housing market as the beneficiaries of this kind of investment is their clients who are employees of companies within the city,” furthers Bailão.

Still, the Deputy Mayor reiterates that investment within the housing market is the most impactful way tech can play a role in helping solve concerns around housing in Toronto.

As for Sidewalk Labs? Bailão thinks if properly managed it could have a positive role in Toronto, but only if key issues like data management are handled responsibly.

“Our city is taking steps such as our recently approved Housing T.O. 2020-2030 Housing Action Plan, our Housing Now initiative, changes to planning policies, and other steps,” to address housing challenges and future demand in the city. “However, the most effective way to ensure that all of this is successful is by having all sectors and individuals working together,” she adds.

Jason Mercer, Chief Market Analyst, Toronto Real Estate Board
TREB’s Jason Mercer says supply is a big problem in the city, and we haven’t seen any movement – whether talking about ownership housing or rental housing, market-based housing or more affordable housing provided by a level of government agency. There are buyers looking to buy but are now “up against basically a flatline in supply,” he says.

“We live in a region that creates jobs across a number of different sectors, including the tech sector, which continues to be a growing sector in the GTA and the Golden Horseshoe,” says Mercer. “This attracts people from all over the world and they require a place to live – we certainly haven’t seen the level of supply to keep up with demand.”

Mercer also notes that we haven’t been building the “transitionary housing” that people require; moving from a condo apartment to a duplex, then maybe a town house, for example, creating life-cycle housing options.

“I’m not saying it’s a magic bullet and if you provide those types [of transition housing] then everyone is going to be able to find affordable housing but I think given more choice at different price points, it would certainly be a step in the right direction.”

Mercer adds that there’s certainly a place for industry stakeholders, traditional (like TREB) and non-traditional (like tech firms) to work together to solve housing issues, also noting the Sidewalk Labs proposal. But he doesn’t think they should be taxed in order to do so.

“It’s one thing to say, ‘hey, we are going to solve the housing supply problem by taxing this group’ – it’s really easy policy. But with a vibrant and growing population where tech grows too, people will need to live in the city they work in and tech companies can’t help if there is nothing there in supply in the first place.

“If you look at the new listings reported by the TREB over the last decade, they are essentially flat – 150,000 to 160,000 listings – yet sales have been trending upwards. It doesn’t make any sense,” he adds.

Mercer continues to stress the need for supply, and while tech companies are not responsible for creating these, they certainly can start becoming more involved in the oversight process given they are becoming an increasing presence in Toronto’s economic and real estate infrastructure.

“It’s not just housing for the sake of housing, it’s to remain competitive on the global stage,” says Mercer.

Matt Daigle, Founder and CEO of Rise
“I don’t know that tech companies are the ones that are going to solve the biggest problems because they already have their own businesses going,” says Matt Daigle, whose online home improvement portal is for anyone looking to build with sustainability in mind. He’s about “baking sustainability into the DNA of home improvement”.

He notes companies are trying to industrialize the way they build a home, using “CNC [computer numerical control] machinery to build out your wall panels,” or “completely rethinking how we actually build a house” with technology elements in mind.

Daigle says, however, “we’re still building to a similar code that we did 100 years ago,” which he thinks is a big barrier. “I think there are already building standards that you can work with but building with sustainability in mind is the way forward.”

Daigle says governments should incentivize solutions that are better for energy efficiency, and that building technologies (like air recirculation and ventilation systems) are increasingly becoming used and asked about. We should be looking at “building better homes using technology,” which might even cost less than we thought, he says.

Daigle is from Fredericton, New Brunswick, and his company serves the interests of Canadians and Americans, helping people cost appropriate and understand the ‘home’ – from decks to lighting to solar air and water space heaters.

“Technology, hardware or software, is at the core of where the housing industry is going,” says Daigle, who notes 3D printed homes is an emerging area, but that, “tech companies don’t owe anyone more than what other companies should be doing when it comes to housing.”

Daigle says technology can certainly help improve housing conditions and efficiency, and there are innovative models already underway. He highlights German building standard Passive House, whose code is focused on building a well insulated shell of a home so your heating and cooling load remains minimal, with less money spent on energy bills, and “you can leave your house for two months without turning the heat on and your house and pipes don’t freeze,” he says.

Rethinking partnerships around affordable housing is important too. Facebook and Google have already done it in the United States, and granted government and community approval, Toronto could adopt a similar model. Seeing what happens with Sidewalk Labs and its development will also set the groundwork for future visions on housing.

If the codes and ways we build are modified, there’s more room for tech companies and other businesses to help out.

Daigle says more availability and attention should be granted to the prefabricated housing market as well.

Claire Buré, Senior Manager at MaRS Solutions Lab, leading work in affordable housing
+
Co-founder of Commons11, a Toronto collective fostering social change through technology, co-design and co-creation.
Transit-oriented affordable housing is Buré’s focus, which she explains is about “innovating within the procurement process for transit infrastructure investment.” So, developing affordable housing as part of the new transit development that is currently being built in Toronto.

“It’s a complex problem with many barriers to innovation, but also many opportunities to do better,” she adds.

Buré says we often treat technology as though it can solve all our problems, however, “we need to remember that we are the ones who create the technology.”

While tech companies could help with the housing crisis, is it safe for them to? And who are they working with (and for) to make this happen? Should they be required to allocate 20 percent to specific housing projects, or community builds to serve more Torontonians looking for somewhere affordable to live?

Buré says either way you look at it tech companies have an enormous power, especially the big five: FAANG (Facebook, Amazon, Apple, Netflix, Google).

“Taxing tech companies and ensuring payment, like the European Commission has done, is one way to generate and redistribute revenue,” says Buré, but we need to be asking: “Who is extracting and who is contributing value to society? And how can we enable greater value for communities, including for housing affordability?”

Buré adds that we need tech companies to ensure diversity and adhere to community values, rather than focus on financial gain.

So, whether or not the tech industry can save Toronto’s housing crisis might also boil down to: do we want it to?

Canada’s national statistics agency is estimating monster growth for population. Statistics Canada (Stat Can) population estimates show fast growth in Q1 2020. The population is now estimated to be growing at the fastest pace in 3 years.

Canada’s Population Estimate Grows At Fastest Rate Since 1990
Canada’s population is growing at the fastest pace in decades, according to estimates. The population hit 37.89 million people as of Q1 2020, up 0.26% from the previous quarter. Compared to the same quarter last year, this is a 1.56% increase. The annual increase is the highest since Q1 1990 – three decades ago.

Canada’s Estimated Population Change

Ontario’s Population Hasn’t Grown This Fast Since 1990 Either
Ontario is also growing at the fastest pace in over a generation, and much faster than the rest of Canada. The province represents 14.71 million people, up 0.36% from the previous quarter. Compared to the same quarter last year, this is a 1.87% increase. We also need to go all the way back to 1990 to see such large growth in Ontario. It’s estimated to be the second fastest rate of growth for any province, right after PEI.

Ontario’s Estimated Population Change

BC Population Is Back To 2017 Levels
British Columbia is growing quickly as well, but we don’t need to go too far to see this record. The province represents 5.11 million in the estimates, up 0.10% from the previous quarter. Compared to the same month last year, this is 1.57% higher. The annual growth is the highest since Q1 2017. Population growth has been a little more consistent in the province.

B.C.’S Estimated Population Change

Quebec’s Population Grows At Fastest Rate Since 1989
Quebec hasn’t seen a population boom this big in over 30 years. The province is at 8.54 million people in the Q1 2020 population estimate, up 0.17% from the previous quarter. Compared to the same quarter last year, this is 1.29% higher. This makes the rate of the growth the highest since Q3 1989.

Quebec’s Estimated Population Change

Canada’s population estimate is forecasting huge growth. There’s a few details to remember during the comparisons though. Prior to 1991, non-permanent residents were not included in Stat Can estimates. This means growth in the 90s was higher, so we likely haven’t hit the same level of growth, if Stat Can used consistent methodology. The rate of growth is still very large, but it’s unclear if the estimate models will hold up with COVID-19 factors.

Canada’s central bank has already taken forceful action this month to cut its influential overnight rate to support the country’s economy through the coronavirus pandemic.

It moved on March 4th during one of its regularly scheduled announcements and again on March 13th in an emergency announcement to cut the rate by a cumulative full percentage point. But even with this swift movement earlier in March, the consensus among economists is that another cut is imminent due to the severity of the circumstances.

“The Bank of Canada and governments have been quick to respond to the crisis unveiling a wide range of policies aimed at helping companies and workers stay afloat. However additional measures are needed and we anticipate the Bank of Canada will cut its policy rate further to just 0.25%,” wrote the RBC Economics team in a report titled Canada’s Economy Enters Uncharted Waters.

A cut to this level would mean the rate would reach the same low level as it did during the depths of the 2008-2009 Financial Crisis. The next scheduled Bank of Canada rate announcement is on April 15th, but with the rapidly evolving situation around the coronavirus pandemic, it’s entirely possible the bank will make a move sooner than that.

When the central bank’s overnight rate gets cut or remains at a low level for a prolonged period of time, typically mortgage rates see cuts and stay low for a corresponding period.

The Bank of Canada had kept the overnight rate at the relatively low level of 1.25 percent for well over a year before slashing it in response to the worsening coronavirus pandemic and oil price drops in early March. During the preceding period, Canadian mortgage rates remained at historically low levels and housing market momentum was building following a slowdown caused by stricter government rules around mortgage lending.

But despite a declining interest rate environment, experts aren’t expecting strong activity levels in the housing market due to the prevailing mood of economic uncertainty and the strict social distancing and shutdown measures adopted by governments across Canada.

There is hope that the sustained period of low rates will allow for the market to bounce back quickly once the impact of the coronavirus wanes.

“[Housing] activity is set to slow markedly—likely both sales and listings—although much lower rates should help a second-half revival,” wrote BMO Economist Priscilla Thiagamoorthy.

As Vancouver realtor Steve Saretsky wrote following the first rate cut announcement earlier this month, inexpensive mortgages are only one part of the equation. Consumer confidence and strong employment levels will be key to any housing recovery once the pandemic subsides.