Second COVID-19 wave will impact real estate
The World Health Organization (WHO) has warned that Canada is now facing a ‘second wave’ of coronavirus cases.
Most Canadian provinces have rising caseloads and rising mortality rates. Ontario and Quebec have the highest rates of infection.
Ontario officials have already ordered indoor gyms, movie theatres, casinos, performing arts venues and indoor dining at restaurants to close over the weekend in Ottawa, Peel and Toronto for at least 28 days.
Bank of Canada Deputy Governor Lawrence Schembri says that if the second wave of COVID-19 infections results in higher restrictions or local lockdowns, it could severely impact the Canadian economy.
Even so, Canadian households continue to be increasingly optimistic about housing, even as the country suffers through the second wave of coronavirus cases.
This year Canada has experienced one of the busiest homebuying sprees in history. Strong expectations on housing have been shoring up overall consumer confidence levels. Forty-four percent of Canadians surveyed by Nanos expected real estate values would increase in the future.
“Can it continue this way? Absolutely not,” says Benjamin Tal, Deputy Chief Economist at CIBC.
According to Royal Bank, Canadians should expect “the spectacular rally over the past five months has exhausted pent-up demand created earlier this spring.”
The averages hide some mixed signals in the market. Condo prices have been weakening in many Canadian cities, while house values have rocketed upward. If we believe that condos are the first rung on the homeownership ladder, then in time, lower condo values will likely impact house prices.
