Our pandemic summer is about to end, and everyone seems obsessed with predicting what would happen during the Fall. The Condo market predictions are going from apocalyptic to unrealistically optimistic.
Then some rely on the existing data, the current circumstances, the expectations of the health authorities, the government plans, as well as the prevailing public mood. By adding all together, they try to make the best possible predictions to what is very likely to happen to the condo market in the greater Toronto area this fall.
Here are some of the predictions that make perfect sense and are in line with the expectations of experienced real estate agencies such as Condo Mapper.
Condo prices will drop
The only thing is that it’s uncertain at what point of this fall the prices will start dropping. Some believe that the price drop will start as early as mid-October, while others think a bit further along the year.
The second thing that is uncertain is how big the drop in prices will be? At this point, there is not enough data to predict to which extent condo prices will drop.
The price drop prediction though is based on the fact that at the moment, there are twice more free listings than condo sales in the greater Toronto area. The expectation for a second wave of infections to begin this fall will also take its toll and likely reduce the demand.
Then there is the fact that more and more people turn towards houses on account of condo living. The reason is apparent, the pandemic, the fear of another lockdown, and the backyard that comes with every house.
Strong demand for condos with balconies and terraces
Even though condos with balconies and terrace tend to cost more than condos without them, the demand is pretty high. The reason is that people are afraid that we can experience another lockdown, and they don’t want to be stuck at their condos for the entire duration of the lockdown. On the other hand, a balcony or a terrace offers a way to taste fresh air and a safe piece of outside haven.
The point here is that even though condo prices will likely drop this fall, prices for condos with terraces and balconies won’t suffer the same price drop.
Record low mortgages still very appealing to many people
Despite the current recession that has taken over the country and the employment rates soaring, there are still plenty of people attracted by the low mortgage rates. These are all middle-class folks who didn’t lose their jobs in the past few months and needed to solve their housing. For them, it would need a massive turn for the worst to change their mind from buying their dream condo.
What’s certain is that the government won’t order a new lockdown or any further restrictions. Worst case scenario, the schools might be closed and remote education to take over. Everything else, all the current protocols are expected to remain the same throughout the fall and later during the winter.
All in all
The condo market in the GTA has proven to be very resilient, even in the coronavirus pandemic’s darkest hours. Furthermore, it showed remarkable recovery potential. Only two months after the first lockdowns, the condo market bounced back to almost pre-coronavirus levels.
So, even if there is a certain increase in new infections during the fall, the condo market in the GTA might slow down in the short term. But in the long term, especially with the few promising COVID-19 vaccines on the way, a strong comeback is easy to predict for this segment of the real estate market in the GTA.