While the Covid-19 pandemic is far from over, optimism is beginning to return. After a slow start, Canada's vaccination program has ramped up, cases are falling, and it feels like there is light at the end of the tunnel. In Ontario, the reopening plan is moving forward and life is slowly getting back to normal. That begs the question, what effect will reopening have on real estate, especially in Southwestern Ontario?
Let's take a look at some of the ways that reopening - and a potential post-Covid reality - could impact the real estate market in Southwestern Ontario.
Will more home buyers come off the sidelines?
The real estate industry has weathered the pandemic better than most. In London, Ontario, house prices have been on a tear. After falling in April 2020 in the wake of Covid-related lockdowns, they went on a blistering 13-month climb, rising from an average price of $423,000 in April 2020 to $636,000 just over a year later. While the market has cooled down a bit over the past couple months, it is still well above pre-pandemic levels.
The increase was attributable in part to Toronto residents fleeing the city looking for more space and cheaper homes, especially since many suddenly found themselves working remotely. Plus, rising real estate prices were a national phenomenon that the region easily got swept up in and which helped make London, ON, one of the hottest markets in the country.
But the pandemic undoubtedly kept many potential homebuyers on the sidelines. While real estate was declared an essential business and therefore able to continue operating throughout the lockdowns, real estate agents themselves often had to adapt in unconventional ways, such as by offering virtual showings or limiting the number of in-person showings.
For buyers who weren't ready to make a home purchase based on a walkthrough of a home via Zoom and who didn't feel comfortable with in-person showings, the best course of action was to simply wait things out. With Ontario reopening and high vaccination rates offering some hope, it's possible that many of those potential homebuyers will become much more active homebuyers in the near future.
While most analysts expect the market to continue to cool, the addition of those new homebuyers could help keep prices elevated. If you’re thinking about selling, that’s obviously great news.
Immigration’s impact on the Southwestern Ontario housing market
Immigration levels could also have a big effect on the housing market, especially since Southwestern Ontario is such a huge draw for newcomers to Canada. Border closings and travel restrictions have made Canada's immigration system highly unpredictable and have severely reduced the size of what had formerly been a big pool of new homebuyers.
While Ontario doesn't have any direct control over immigration and border controls, as the top destination for immigrants to Canada it stands to reap the most benefits from increasing immigration numbers. The first step will be reopening the U.S. border -- which, given falling case counts south of the border, may not be that far off -- which will presumably be followed by a loosening of travel restrictions with other countries.
The big unknown here, however, is when travel restrictions will actually be lifted. As the recent spikes in Covid in India and Brazil - both important countries for immigrants to Canada - the pandemic is far from over everywhere and vaccination rates vary substantially globally. Depending on how the pandemic and vaccination rates progress overseas, that will have a significant impact on how long it will take to get immigration back to pre-pandemic levels.
Once immigration starts ramping up, however, it could supply yet another new source of homebuyers for London, Ontario and the surrounding region. That should help keep the real estate market from cooling off too much.
Will remote workers choose to live in Southwestern Ontario?
Another big question mark hanging over the post-Covid economy and Southwestern Ontario's real estate market is how many of us will still be working from home. If employers expect workers to return to the office, that could mean buyers could be drawn back to looking for homes in Toronto. But if remote work is here to stay, that will likely benefit Southwestern Ontario.
While only time will tell, it looks like remote work will definitely remain more prominent than it was before the pandemic. A recent poll, for example, found that 74 percent of Canadian business owners say they plan to continue to offer employees the ability to work remotely even after the pandemic. That almost certainly helps make Southwestern Ontario an enticing destination for Torontonians looking to escape the city's high costs and lack of space.
That said, there are some signs that the flight from Toronto that we saw during the pandemic is starting to reverse. Condo prices in the Greater Toronto Area (GTA) are rebounding after taking a significant hit during the early months of the pandemic. Downtown Toronto condo prices have seen an especially strong upswing, suggesting that some people are ready to return to the big city.
However, by and large most indicators suggest that the real estate market in Southwestern Ontario will continue to remain strong as Ontario's reopening continues and we inch closer to a post-Covid world. That means that London, ON, and the surrounding region should still be strong sellers' markets.
If you're thinking about selling, now might be a great time to dive in. With real estate prices potentially near their peak, the current market in Southwestern Ontario offers a great opportunity for home sellers. To find out how to sell your home for a great price, but without the hassle, talk to a real estate solutions company. They can give you insights into the market and show you how to sell without even having to list your home.