Batool Salim says she hasn't felt the wrath of COVID-19 on the Toronto market.
Instead, the 25-year-old realtor for Re/Max Realty Specialists Inc. represents mostly millennials like herself. A lot of them are just getting into the market, but these months of COVID lockdown have been really good for first-time home buyers.
“I haven't been in real estate that long – it's been less than five years – but this has been my best year so far,” she says.
With such an optimistic outlook, but knowing it's hard to enter the market, whatever window of opportunity the pandemic provides her clients to enter the market, Salim's going to help them break through. So we asked her whether that window of opportunity also includes a lower price point.
Is there such a thing as a “COVID discount” when buying a home?
That term, “COVID discount” is probably just used metaphorically because it depends on why the seller is selling and the circumstances of their situation. If they're desperate, if they need to leave right away, if they lost their job, or how long the property has been on the market, its location and the surrounding competition are all determining factors as to whether a buyer can get a discount.
If the home is dead centre in Toronto with a limited amount of listings in the surrounding area and it's been on the market one day and someone is presenting an offer, I doubt that they're going to get a significant amount off the asking price. I don't think there's a certain answer to the COVID discount question, it really depends on the circumstances.
In fact, the Toronto real estate market stats were released a few days ago and they show that real estate prices have gone up, not down. Year-over-year we're up. It's not by much, just 4.3 percent, and month-over-month 3% up, but prices have not gone down at all, surprisingly.
I don't think people will necessarily get a discount on the price, but the reason it's a good time to buy regardless of a discount is that there's less competition. Not a lot of people are looking to buy right now. People don't want to be out unnecessarily unless they have to make purchase. There's less competition and mortgage rates are so low right now, so why not take advantage of that?
As we come out of quarantine and the economy is reopening, things are going to move upwards. We've seen that just in the last month because of the numbers. From April to May there has been a 50 per cent increase in sales, which means the market is trending upwards in general. As the economy reopens, even on a smaller scale, I can only see those numbers going up and trending upwards. Hopefully by the fall, we will see something like what would've been the spring market (without COVID). This is my prediction, but it depends on whether or not we have a second wave.
There are still a lot of suggestions that the market won't recover until the end of 2021, but the numbers have not gone down. The prices have not gone down, they're only going up. Plus, the Toronto market is so notorious for bouncing back, even after a recession has hit. I don't think any downturns will last because there's so much demand and the bottom line is we have a shortage of housing and a high number of people who want to live in Toronto.
Have a story idea you want to see covered or a topic you'd like to learn more about? Email email@example.com