A series of steady positive developments were announced last month, and it appears that the widespread deployment of one or more COVID-19 vaccines will pave the way for Canada’s housing market next year.
It is expected that Health Canada will approve the use of the Pfizer vaccine within a few days. Today, Prime Minister Justin Trudeau announced that Canada would receive 249,000 Pfizer vaccine doses by the end of this year. Three other potential vaccine candidates are also under consideration for approval, and by early 2021, millions of doses of vaccine may be provided to priority recipients.
Although the arrival of the vaccine is unlikely to immediately make a major change in the country’s housing market, Matthew Boukall, vice president of product management and data solutions at Altus Group, said that the vaccine’s introduction might immediately affect home buyers’ decision to purchase. Where are they going to move?
“Those who want to live, whether they are considering living in an urban area or moving to the suburbs, the vaccine will provide certainty about where they will work and their workload. One day will be spent commuting to an office in the city or work from home.”
Large cities like Vancouver and Toronto have felt the most significant impact of the epidemic on their housing markets. Reduced rental demand, stagnant immigration, and a considerable increase in the number of buyers looking to buy in the suburbs have caused apartment sales to lag behind the single-family residential market for most of 2020.
The November market data from the Toronto Regional Real Estate Board shows that the difference between the single-family home and apartment markets in the urban “416” and suburban “905” areas the continues-the price of “905” single-family houses rose by 20%, while “The price of apartments drops by 3% every year.
Book all said the vaccine would clear the way for international and local students to return to college campuses and reinvigorate rental demand. It may also start the city’s struggling tourism industry and increase demand for platforms like Airbnb, which rely heavily on downtown apartments for short-term rental supply.
During the pandemic, many urban residents migrate to the suburbs, and this trend of urban flight may slow down as the vaccine launch begins.
Benjamin Tal, the deputy chief economist of CIBC World Markets, said: “This trend will continue, but it will slow down sharply.” He pointed out that urban residents who moved to the suburbs had already appeared before the pandemic began.
“I think at some point; this city will be a very attractive place. It will be cheaper, and people will still like to live in the city, especially if you can go back to the office.” He added.
Tal said he expects the apartment market to see weakness in the coming months. However, even if the vaccine has not yet been widely deployed, we can expect that demand suppression and price adjustments will drive a strong spring market.
When people realize that the market is actually an opportunity to enter the market, as people get closer to the vaccine, the saying that people don’t want to live in apartments may start to disappear. “
Although some market comments may suggest that the housing supply will face challenges in 2021, Tal does not believe that the market will be in short supply in the first half of this year.
Bucur pointed out that Toronto will have a large number of new housing deliveries next year. He said that this and the increase in the number of listings on the market would create more supply. With improved affordability and absorbing excess inventory of urban apartments, buyers and tenants who were previously priced outside the city are expected to return.
Tal added that there is evidence that the apartment market adjustment has ended.
“We are seeing rental demand and rental inflation stabilizing. This means that people are beginning to use the weak market to enter the market.”
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