COVID-19 is a potent deterrent to the Toronto housing market's red-hot bidding wars
Bidding wars in the traditionally red-hot Toronto housing sector are likely to slow down considerably, RE/MAX predicted.
In its latest analysis, RE/MAX pointed at the rapid decline in the number of wealthy immigrants and the coronavirus-induced market impairment as the major factors in this development.
“Low inventories and a shortage of listings in the city often spur bidding wars between homebuyers,” RE/MAX said. “Yet, recent shifts could discourage people from listing their homes in the short term, with fear of not getting the best price under current conditions.”
Strict mobility restrictions will also prove to be a significant deterrent to market activity until further notice, according to the analysis.
“Home buyers may take a wait-and-see approach for when the market recovers,” RE/MAX said.
Still, some of the more enterprising buyers might take a stab at getting their new homes even during the outbreak, as the Bank of Canada’s benchmark rate is now sitting at an all-time low of 0.25%.
“Now that mortgage rates are lower, buyers can borrow more money at a decreased interest rate making their mortgage payments more affordable,” RE/MAX said. “Another benefit is that homebuyers will have more housing options to choose from. Since they can qualify for more financing, it can be used to purchase a home with more of the features they desire.”
