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The condo market in Toronto was fairly predictable in the recent few years. The demand was constant, the supply was steady, the financial aspects were solid, and everyone seemed contended.
Then came 2020. Unfortunately, what once seemed far on the horizon, reached the shores of Canada. The current pandemic profoundly changed everything, not just the condo market and the property industry. Real estate companies such as CondoMapper were among the first that had to deal with the initial shock and all that came with it.
They, as well as many others like them, soon understood that the condo market won’t be the same in the near future and that all past projections are not relevant anymore. A new set of factors determines Their new reality.
Here is a list of the main factors that can influence the condo market in 2020 and beyond that.
The economic recession
In this regard, Toronto and its greater region seem to be doing better than the rest of the country. But still, the recession is taking its tool everywhere. The sooner the country swims out of it, the sooner the property sector will be able to recover. Any growth in the property sector, the condo market included, will be related to the current economic movements.
Lockdowns & restrictions
Many fear that a second wave might trigger another lockdown and restrictions that might plunge the economy into a greater recession. On the other hand, the government seems more determined to impose stricter health protocols than another lowdown and putting everything to halt. Of course, officially, nothing is excluded when it comes to the well-being of people and public health. But if we’re to make out bet on what would happen in case of the second wave of COVID-19 cases, we predict that health protocols for everyone will be preferred on account of a lockdown and movement restrictions.
The current mortgage rates are at all times low – less than 2%. They are expected to stay at that level for as long as there is a recession. From the look of things, those rates are expected to stay in the foreseeable future, at least in the next six months. That’s pretty much guaranteed.
Due to the pandemic and the restrictions that resulted because of it, unemployment reached 17.3% in May, whereas in June it dropped to 12.3%. To put things into a better perspective, in February, the unemployment rate was just 5.6%. Many analysts and experts believe that the property market, and the condo market, will heal as the unemployment rates decline.
There are several COVID-19 vaccines in their late stages with promising results. However, promising doesn’t mean imminent, and we still need to be patient and careful until an effective vaccine has been released to the public.
On the other hand, once an effective vaccine is introduced, it will have a massive boost over the population, which is expected to have a positive on all aspects of the economy, not just the property industry.