A tiny virus you can only see under a microscope has had such a huge, unprecedented impact on every single industry in our economy. For the real estate industry, COVID-19 has changed the way people buy and sell homes, and it has also changed the way people look at their homes.

For many, the pandemic forced people to re-evaluate their homes. Some made changes inside their home, by renovating it to make more room or create a home office. Others moved to a new home in an entirely new place.

Throughout the last two years, the housing market in Canada and more specifically, in the GTA, has remained strong – and perhaps what’s more interesting about the effects of COVID-19 on the real estate market is the study of human behaviour.

Deemed an Essential Service

From the start of the pandemic, construction and real estate were deemed essential services and operational with strict guidelines. This meant that the homes promised to people who had purchased them prior to the pandemic, would still see their homes being built.

It also meant construction and tradespeople remained employed. In the GTA alone, the building and renovation industry provides more than 230,000 jobs across the region and $26.9 billion in investment value, according to the Building Industry and Land Development Association (BILD).

Unpredictable Effects

Since the spring of 2020, sales have not slowed. In the new construction homes sector, it is a story of demand outweighing supply.

“While available inventory is relatively low for both new single-family homes and new condominium apartments, the current supply dynamics are different for each sector,” said Edward Jegg, Analytics Team Leader at Altus Analytics. Jegg was commenting in November 2021 after a report entitled, New Homes Monthly Market Report, was released by Altus Group, BILD and the Toronto Real Estate Board.

“There is very little new single-family product making it to the market, which is driving prices to new records. In contrast, there are significant levels of new condominium apartment product being launched, but strong demand means it is being bought up relatively quickly,” he added.

Rising Price of Real Estate

The benchmark price for new single-family homes reached another record high of $1,573,764 in September, which was up 33.5 per cent over the last 12 months, according to the Altus Group, BILD and the Toronto Real Estate Board report.

The benchmark price for new condominium apartments eased in September compared to the previous month, to $1,036,831, which was up 2 per cent over the last 12 months.

“At a time when new housing supply is being rapidly absorbed by the market, it is more important than ever for municipalities across the GTA to remove every roadblock to bringing more housing online,” said Dave Wilkes, BILD President and CEO said in a release about the report.

REPORT LINK: https://bildgta.ca/Assets/misc/Altus%20Data%20Solutions%20media%20backgrounder%20October%202021_pp.pdf

New Buying and Selling Tactics

A few years ago, if you had asked a home builder if people purchased their new home online, the answer would have been a definitive ‘no.’

Researching homes and communities online? Yes.

Watching videos of properties and taking virtual tours? Yes, video ads and virtual tours were starting to gain popularity in the resale market and on the new construction side as well – but not as much as they are today.

Now, many real estate developers who launched new communities in 2020 and 2021 will tell you that they sold home almost exclusively online.

Instead of traditional print, signage and sales office advertising, digital and email marketing campaigns were deployed to reach people where they were already spending time – online.

Instead of holding grand opening events at sales centres where purchasers would line up for hours to get in, virtual sales events were held and digital site plans that updated availability in real-time created the familiar exhilaration of buying a new home in a new community.

Changing with the Times

At different points over the last two years, sales offices could open and events could take place, but it was almost always by appointment and outdoors whenever possible to keep staff and clients safe and comfortable.

In many ways, the pandemic changed the way the real estate industry does business. From personalizing the home buying experience to offering various communication options, to conducting marketing and sales online – right through to accepting electronic signatures on digital sales documents.

The demands of interacting over a screen during these unprecedented times has made futuristic aspects of the industry speed up and actually come into play today.

Robust Real Estate Market

Overall, the real estate market in Canada, Ontario and the GTA have remained robust throughout this public health crisis and the early economic fallout.

Early on, the government offered financial relief to Canadians impacted by the pandemic, the Bank of Canada reduced its key interest rate to stimulate the economy and residential sales and prices posted record growth in 2020 and into 2021.

In Ontario, the GTA remains one of the most desirable places for people to invest in real estate, live, work and raise a family.

In the 12 months between July 2019 and July 2020, a net 60,000 people, left the City of Toronto and Peel Region for other parts of the province. This represents primarily children under the age of 5 and their parents, who moved in search of family-friendly housing and lower costs, since working remotely replaced a long commute.

A research paper published by Ottawa-based Smart Prosperity Institute and the Ontario Home Builder’s Association states that Ontario’s population is forecast to grow by more than 2.2 million people over the next decade, and it is estimated thatthe nation’s most populous province will need approximately one million new homes by 2030 to meet that demand.

The last few years have proven that the demand for housing remains robust in Toronto, the GTA and across southern Ontario, and that the real estate industry is dedicated to innovating, adapting and building homes for people and families across the province.

Smart Prosperity Insitute/OHBA release link:

https://www.ohba.ca/wp-content/uploads/2021/10/ontario-needs-one-million-new-homes-in-the-next-ten-years.pdf