Toronto: Latest on house prices, mortgage payment defferal, rental eviction freeze and more.
Elsewhere: The pandemic's effect on Canadian housing, is density to blame for New York's Coronavirus hotspot, and the UK housing market is put on hold.
Latest Real Estate/Housing & Coronavirus Info & Tips
Toronto Home Prices & Corona Crisis (So Far) (Move Smartly)
While the Coronavirus (COVID-19) crisis is unprecedented, its impact on the real estate market can be seen in terms of demand and supply effects which tend to be more familiar.
It’s understandable to be freaked out when the world goes pear-shaped. That’s why toilet paper is sold out everywhere. But being worried about the future isn’t enough to qualify for deferred mortgage payments. These programs are for people who are genuinely struggling to make their next mortgage payment. They’ve lost their job and/or most of their income, and they don’t have reserves to draw on. If you’re not in this group, you aren’t likely to be eligible.
New Canada Emergency Response Benefit (CERB) and Other Assistance (Government of Canada)
Canadian banks have committed to work with their customers on a case-by-case basis to find solutions to help them manage hardships caused by COVID-19. Canadians who are impacted by COVID-19 and experiencing financial hardship as a result should contact their financial institution regarding flexibility for a mortgage deferral. This allows flexibility to be available − when needed − to those who need it the most.
Mortgage Strategies for the Coronavirus Crisis (Move Smartly)
Last week’s surge in fixed mortgage rates was caused by a sell-off in GoC bonds that was likely triggered by short-term liquidity demands. If that assessment is correct, it is reasonable to expect bond yields (and fixed mortgage rates) to resume their downward slope once financial markets stop freaking out.
Bank of Canada slashes key interest rate to 0.25% (Global News)
The central bank is also launching two new programs. One will aim to alleviate strains in short-term funding markets, while the other will see the central bank begin acquiring federal government securities in the secondary market with a minimum of $5 billion per week.
If you pay your property taxes through a mortgage, owners should contact their financial lending institution or mortgage company to understand how it would affect their mortgage payment, city spokesperson Ashley Hammill said in an email.
“No one will be kicked out of their home or their rental apartments based on not being able to pay the rent – it’s just not going to happen, we won’t allow it to happen,” the premier said during a news conference held at Queen’s Park on Friday afternoon.
Real Estate Deemed Essential Service (Government of Ontario)
Read the list of essential workplaces in response to COVID-19 (2019 novel coronavirus).
Buyers, sellers and agents grapple with a housing market shaped by coronavirus (The Globe and Mail)
Other people who are in a bind are the tenants who have given notice on their rental property with the expectation they would be moving into a newly-finished condo unit. With many government services shut down, inspectors are not giving out occupancy permits for new construction, she says.
“It reminds me of a 'Mission: Impossible' movie, where tick, tick, tick, the time is ticking down and someone has to try to save the day before everything explodes,” said William Blake, a landlord who spoke Tuesday on behalf of the Ontario Landlords Association. “This is how a lot of tenants and landlords feel about this April 1 rent deadline coming up.”
“When we talk about impact on housing, the hosts we’re concerned about are the ones who are renting multiple houses or apartments,” said Murray Cox, the activist and programmer behind Inside Airbnb. “They’re the ones taking housing off the market, displacing residents looking for long-term housing, and raising the cost of housing.”
More than 213,000 requests for mortgage deferrals – skipping payments – have been completed or are still being processed by the country’s six largest banks. On March 17, the banks announced a program that allows customers facing financial hardship as a result of COVID-19 to defer payments for up to six months.
Canadian home searches on the website were 38 per cent lower on March 23 compared to March 5, according to data from the real estate marketplace, which is based in Saskatoon, Saskatchewan. Point2 Homes has seen the pace of search declines accelerate since the World Health Organization declared a pandemic on March 12.
At Canada Mortgage and Housing Corp., our goal is that by 2030, everyone in Canada has a home they can afford and that meets their needs. The coronavirus pandemic only intensifies our focus on the importance of housing.
“Density is really an enemy in a situation like this,” said Dr. Steven Goodman, an epidemiologist at Stanford University. “With large population centers, where people are interacting with more people all the time, that’s where it’s going to spread the fastest.”
Density makes mass transit possible. It allows for more affordable housing. It creates environments where people can walk and where children can find playgrounds. It enables us to pool risks. It supports big public hospitals and stronger safety nets. It allows us to curb climate emissions, which present a public health problem of an entirely different kind.
Yet many of the calls for actions to protect vulnerable renters and homeowners from the economic ravages of the pandemic miss one oft-maligned category of property interests: landlords. Rental property owners who cannot collect the rent are still liable for their own bills. Not just the mortgage, but utilities, insurance, taxes, and payroll for staff and contractors they employ. If landlords are asked to carry the brunt of the pandemic’s blow to the economy, they’ll lay off workers, miss their own obligations, and possibly wind up forfeiting their properties.
UK housing market put on hold after plea from banks (FT)
The government’s move on Thursday evening followed calls from banks to freeze the market. In talks between lenders and ministers, banks have expressed concern about the impact of the pandemic on valuations. They are also concerned about granting credit when the economy is in freefall, according to senior bankers.
Top Photo Credit: Elijah-Lovkoff, Getty/iStock
Realosophy Realty Inc. Brokerage is an innovative residential real estate brokerage in Toronto. A leader in real estate analytics, Realosophy educates consumers at Realosophy.com and MoveSmartly.com and and helps clients make better decisions when buying or selling a home.