So, we've all heard at this point that the condo market has been hit relatively hard due to the pandemic since March but how do you guys feel if I predict that bounce-back year in 2021? Well, let's first discuss the reasons why 2020 has been a slow year for condos. As many of you know (and already experiencing), the "work from home" factor is playing a massive part in decreasing the demand for living close to work and cutting commute times. On one hand, who's complaining about going to work in comfortable home clothing versus spending all the preparation time to get to work. The commute to the "work" is literally steps away from your bedroom and kitchen, a far cry from some who used to have 60 minutes plus of commute time previously. Joking aside, this lack of need to live in the downtown core or next to public transportation has fuelled the transition for many to look for more living space. Those who live with others (be it a significant other, family, or roommates) are really feeling the need for additional living space and many have gone that route to move out of the city and into the suburbs for more affordable space. Condo living also added an extra layer of obstacles through the reliance on tight elevators. The restrictions in many buildings are generally limited to 2-4 people as an attempt to socially distance people. This naturally causes a bottleneck effect of longer wait times just to move within your own building and adds to the stress. 

Now enough about condo living itself, another huge factor that's putting a halt on condo prices is the suffering rental market. Again, condos suffering the hardest are the ones downtown as many of the unavailable units used for Airbnb have become available for long term tenants. This effectively flooded the market with listings while tenant rates have declined due to lack of student housing and immigration restrictions. Thus, the result was a 10-15% (conservatively) decrease in rental rates and still, many are finding it hard to find quality tenants. Investors naturally feel pressure to not overpay for condos that are not giving a good return on investments (ROI) to ensure that decreasing rental rates can help cover the mortgage. This trend allowed the low-rise housing market to boom as demand was much higher than supply. Adding the fact that mortgage rates continue to plummet, people started bidding for houses around and outside of the GTA: a perfect storm for a seller's market. 

With all this said, I personally do feel that a bounce-back year would be occurring in 2021 as the interest rates for mortgages likely won't be going up in the near future as the economy took a massive hit and will take a long time to recover. This artificial boost will help the lower-priced housing options to thrive. With the recent announcements of three different COVID-19 vaccines close to distribution with 90% effectiveness, this is also very promising news that we can start looking forward to a brighter future soon. Once this does happen, companies may want to have employees come back into the workplace and creating another wave of demand to save commute times and increase convenience. 

If you or anyone you know want to know more about what I think, feel free to contact me. I'd be happy to chat and help with anything else.