In recent weeks, the government has put the Quebec economy on pause. Will the COVID-19 crisis have an impact on real estate? Central banks and various levels of government are putting in place a number of measures to support the economy, and in times of crisis, real estate remains a stable value. After the 2001 New York bombings and the 2008 financial crisis, the real estate market came through it all very well. The impact of COVID-19 on real estate is difficult to assess, but we can assume that it will be similar to previous crises. Of course, should the situation persist for much longer, our observations would have to be revised.
COVID-19 should have little impact on residential real estate
Housing is a basic need, and the health crisis doesn’t change that. Before the crisis, unemployment was very low. Unemployment will undoubtedly rise, but with the pre-crisis labor shortage, there will be less pressure on certain sectors, such as the restaurant, hotel and construction industries, to name but a few. Coupled with low interest rates, we believe these factors should encourage buyers to acquire properties. The impact of COVID-19 on residential real estate should be low in terms of property values. As sanitary measures lead to fewer new properties being put up for sale, it’s even possible that prices could rise, should the number of properties on the market become scarcer. However, many households may postpone the purchase of a property due to the uncertainty brought on by the crisis, while others may want to get rid of a property that has become too expensive for their means. This should balance the market.
In times of global crisis, many people don’t have the nerves to tolerate stock market fluctuations. So they take refuge in real estate, which has always demonstrated much greater stability! The impact of COVID-19 on multi-tenant real estate is also likely to be felt in the form of higher values, especially given the ups and downs of the stock market.
Major impact of COVID-19 on commercial real estate
Companies with low levels of liquidity will find the coming months very difficult. The impact of COVID-19 on commercial real estate is likely to be major. Restaurants, which will have to operate at 50% capacity, and shopping malls, which will have to remain closed for the time being, are the hardest hit by this crisis. In the retail sector, which was already affected by e-commerce, there is a risk that interest in street-front stores will wane. We’ll have to be more cautious about buying commercial real estate. Despite this, the crisis will create opportunities for other, more seasoned and wealthier investors.
Stable industrial real estate
The impact of COVID-19 on industrial real estate, already in near-short supply, will undoubtedly bring some balance. At this stage, it is difficult to predict the impact of the health crisis on industry.
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A team of real estate brokers ready to face COVID-19
The government authorizes real estate brokerage activities for priority transactions:
- for which possession is scheduled to be taken no later than July 31, 2020
- who aim to be rehoused by July 31, 2020.
Our team is well-informed and respects the rules established by public health to minimize the impact of COVID-19 on your real estate transactions.
Physical visits
Physical visits are authorized for priority transactions. To do so, we respect the following conditions:
- We ask occupants and visitors to sign a certificate before the visit.
- Only the broker and one visitor at a time are allowed on the property.
- Occupants must wait outside during the visit.
- No children or people over 70 are allowed during visits.
- A safe distance of 2 metres between each person is maintained at all times.
- Hand washing before and after each visit is mandatory.
- The broker supervises the visit to ensure that no surface is touched by visitors.
- Brokers disinfect handles, doorbells, switches, etc. before and after each visit.
COVID-19 has no impact on real estate inspections and the services of professional surveyors and appraisers. These are authorized, but must comply with public health regulations.
New registration and virtual tour
At this stage, the government only allows virtual visits for new listings and so-called non-priority transactions. Our team is constantly monitoring the situation and is here to support you in your residential, commercial or industrial real estate transactions.
Contact the Jean-Guy Ayotte team for the safe purchase or sale of properties during the COVID-19 crisis.
Main photo credit: Unplash