Latest in Mortgage News: 4 in 10 Buyers Open to Purchasing a Home “Virtually”
Social distancing restrictions in place for the past few months have transformed the way homes are bought and sold, with many showings now taking place “virtually.”
And many homebuyers—42%, to be exact—are just fine with that, according to a recent survey by the Ontario Real Estate Association (OREA).
Four out of 10 Ontario homeowners said they were “open” or “somewhat open” to buying a home while only being able to view it through electronic means. A third (33%) said they would not purchase a home virtually.
Here are some of the other impacts COVID-19 has had on homebuying and selling decisions:
37% of homeowners in Ontario who have a home and plan to sell it had planned to list their homes for sale this spring
7% currently have their home up for sale
Of those who don’t,
11% said they plan to list their home in the coming months whether the pandemic is “over” or not
28% said they will list their homes once the pandemic is officially over
Many homebuyers now have slightly different expectations for their next property due to being in lockdown for the past couple of months.
28% said they want a bigger home, and/or more space, and/or more amenities
25% want more outdoor space
8% want a smaller home
5% said they want a more practical or convenient layout
90% of Ontarians who are active in the real estate market report that they haven’t dipped into their home equity line of credit (HELOC) or refinanced their home in order to cope financially during the pandemic
This supports the Bank of Canada’s recent findings that, overall, about 65% of authorized HELOC funds remain untapped, amounting to $310 billion worth of available credit.
Respondents were asked where they see home prices going once the pandemic is over:
7% expect prices to increase a lot
27% see prices rising somewhat
19% expect prices to remain flat
34% foresee somewhat of a decrease
6% expect prices to fall by a lot
Home Sales Start to Recover in Certain Parts of the Country
Real estate data from May suggests certain housing markets are slowly getting back on the road to recovery, while others continue to see depressed activity.
In the country’s largest market, the Toronto Real Estate Board (TREB) reported 4,606 sales during the month, down 53.7% compared to a year ago, but up 55.2% compared to April’s depressed figures.
It was a similar story for new listings, which were down 53% year-over-year, but up 47.5% from April. The average selling price for all home types was up 3% from May 2019 to $863,599, and up 4.6% compared to April.
“Providing we continue to see a gradual re-opening of the economy, it is very possible that home sales will continue to improve in the coming months,” said TREB President Michael Collins.
Meanwhile, Greater Vancouver saw 1,485 sales in May, down 44% from last year and 54% below May’s 10-year average. Home prices have so far remained steady, with the MLS home price index up 2.9% compared to a year ago and unchanged from April, according to the Real Estate Board of Greater Vancouver.
In Canada’s other major cities:
Calgary reported 1,080 home sales in May, down 44% from last year but up 88% from April.
Montreal saw sales plummet 41% in May compared to last year, according to the Quebec Professional Association of Real Estate Brokers (QPAREB). The median price of a single-family home was still up 9% year-over-year to $370,000.
BCREA Forecasts Rebound in Home Sales in 2021
Home sales in British Columbia are expected to decline 21% through 2020, dropping to 61,000 this year compared to 77,347 units in 2019, according to the British Columbia Real Estate Association (BCREA).
“The bright outlook for 2020 home sales has been upended by the COVID-19 pandemic and resulting recession,” Brendon Ogmundson, BCREA’s chief economist, said in a release.
But the association is optimistic for a recovery in 2021 as it sees sales rising by 45% to 88,500 units.
“As the economy ‘reopens’ and measures to mitigate the spread of COVID-19 are gradually eased, we expect home sales will start to rebound, aided by record-low mortgage rates and pent-up demand,” Ogundson added.
The association sees home prices ending 2020 up 1.8%, with another 5.6% increase forecast for 2021.
Mortgage Broker Handed 3-Year Prison Sentence
A Calgary mortgage broker was handed a three-year jail term for his role in a $1-million fraud and money laundering scheme.
Kalim Khan could face an additional 18 months in jail if he fails to repay a court-ordered fine of $66,000, which is the amount he laundered for others, even though his payment for his role was just $4,500.
Following his sentencing, Khan told the court, “I’m glad it’s finally over. I can move forward with my life,” according to the Calgary Herald.