How the Toronto housing market will look post-quarantine

How the Toronto housing market will look post-quarantine

How has buying and selling changed with COVID and what will the Toronto housing market look like moving forward? We talked to Ryan Wykes, SVP of Sales for about how things have shifted – including how those shifts are changing real estate transactions, and in some cases, even homes themselves.

Q: What does Phase 2 look like in terms of the GTA housing market?

A: To be honest, I don't think it's going to have that big of an impact. Even before Phase 2, we were already seeing buyer and seller confidence on the rise. People are getting comfortable with the new norm, and they're moving ahead with their real estate plans – they’re just doing it a little differently. They're taking the proper precautions, whether it's mandatory masks for showings, making hand sanitizer available for visitors, or really upping the game on virtual tours and other online marketing. All that stuff is becoming the norm: if you show up to a property now, there are instructions for wearing masks, not touching surfaces, etc., and people are following them.

We've seen the number of listings and transactions go up every week since the bottom of the market, which was the second or third week of April. I think the upward trend will continue, but not because of Phase 2. Really, the latest reopening didn't change anything around what realtors are allowed to do. We still can't have open houses, for example.

Phase 1 actually had a much bigger impact – that's when a lot of buildings that weren't allowing showings relaxed those rules, and let potential buyers in to see units. Phase 2 is just keeping that momentum going and continuing to build buyer and seller confidence.

But let’s not forget one thing: it could all change very quickly again. Just look at the spike in COVID cases in the US right now, with some states going back into lockdown. A situation like that would likely drive us back to mid-April levels.

Q: So how do you think all of this impacts how we will buy and sell in the long term?

A: Some of the things agents have implemented in the short term are here to stay – like virtual tours, and buyers being more selective about the units they see in person. I think buyers will be doing a lot more of their “window shopping” online. People will still go see properties, of course, but they just won’t see as many. Someone who would have spent their whole Saturday visiting six or seven properties might now only see two or three max.

For that reason, it's more important than ever for realtors to put out quality marketing. When you’re looking for an agent to help you sell your home, you need someone who offers a really good marketing package with professional photos, a virtual tour, floor plans and a 3D walkthrough. A few photos taken on a cell phone isn’t enough anymore: buyers are doing their qualifying online and won’t get enough rich information from photos alone to push them to see a unit in person.

Taking precautions when going to see a property will also continue to be a big thing, and other elements of the transaction will shift as well. Lawyers have been doing virtual signings, and lenders are moving in that direction too. Every part of the industry is doing what they can to go virtual – like many of us, quarantine has opened their eyes to what's possible and what will contribute to a better experience for customers.

Q: Do you think buyers will be looking for different features in their condos in a post-pandemic world?

A: For sure. With people working from home more and going out less, obviously space is going to become more of a want. Buyers who would have traditionally been looking for a 1-bedroom might now be in the market for a 1+1 or 2-bedroom.

But while people will want more space, in a city like Toronto, affordability will continue to be a factor. People will buy as much space as they can afford, and for a lot of buyers, a home office with a door won’t fit the budget. I think the trend for buildings that offer shared “coworking” spaces as an amenity will definitely get stronger. For example, Central Condos at 38 Widmer is offering conference rooms and work lounges. Many people can't afford to have that kind of setup in their private unit, so that will put a premium on buildings that offer those types of spaces.

Home Office

Q: Will developers be more likely to build larger units with offices post-COVID?

A: Although that sounds like it would totally make sense, I really doubt COVID will have much of an impact on unit design. That’s because 70% of pre-construction units are purchased by investors, and developers build what those investors will buy – smaller, less expensive units that are easy to rent, put on the short-term rental market or resell for a profit.

As purchasers, end users are really in the minority when it comes to pre-construction sales, mostly because they find it too hard to make such a major purchase based on a floor plan and a price. And while investment demand is down during COVID, investors are still the ones buying up most of the pre-sale units. So unless that buyer mix changes, I don't see developers changing the way they do things.

Smart Home

Q: In the Spanish Flu pandemic in the early 19th century, half bathrooms became the norm in homes so people could keep visitors out of their main washroom. What kind of changes do you think will be the norm after COVID?

A: Touchless faucets and smart home features you can control from your phone – I’m sure those will be big, but people already wanted that, and COVID has just brought it more to the forefront. Maybe now developers will be more likely to include them or speed up their plans around them a bit more. But if you look at a lot of projects that started well before the pandemic, those features were already there.

Want more market insights?

Stay tuned for our market update, coming the first week of July, as well as our bedroom reports, which show trends, prices and more for studios, 1-bedroom and 2-bedroom units across the GTA.

About Ryan Wykes

Ryan is a top performer, dedicated leader and mentor, and a gifted negotiator with a thorough understanding of business and marketing, especially in the Toronto real estate market. He’s been with since 2012.

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