Why the pandemic shook up the real estate market
Published on May 3, 2021
Real estate had a spectacular year in 2020 and the market frenzy hasn’t cooled down yet in 2021. Prices are rising, selling times are revving up and over-market bids are turning heads! But why is all this activity happening while Quebec is in the midst of a pandemic?
To answer this question, DuProprio contracted the firm Ad hoc to conduct a web survey of 600 respondents across Quebec who have bought or sold a property since March 2020 or who plan to do so by March 2022.
How has COVID-19 impacted the market? And what is motivating people to jump into the fray? Here’s how interest rates and the need for space have affected our industry over the last year.
One in two Quebecers maintained their plans
COVID-19 did not make the real estate market hit the brakes. Quite the opposite. The record-breaking market results speak for themselves. This is less surprising when we realize that, despite the pandemic, half the Quebecers surveyed who were planning to buy or sell property chose to go ahead with their plans, and that one in five moved their plans forward.
The attractive interest rates were an incentive for about half the buyers surveyed who acted on their plans sooner than anticipated. The next most common reasons given were the price explosion, that is, the fear that prices would continue to rise, and then the need for a change.
Life in the suburbs or the country has appeal
Many answered a call for fresh air or wide open spaces, with 77% of the buyers surveyed saying they bought or plan to by in the suburbs or the country. While generally speaking the main reason for moving out of the city is the more affordable prices, during the pandemic the desire for green and quiet spaces slightly edged out the price factor.
This search for more space can also be seen in the types of properties that are sought-after. Nearly three in five respondents with an apartment, multiplex or condo plan to buy a single-family, bigenerational or semi-detached home in the coming year.
Teleworking’s role in real estate
Telework, which is inspiring both uncertainty and motivation for the time being, certainly has a role to play in consumer preferences. More than one quarter of respondents participating in the exodus toward suburban and rural areas said telework was one of their motivations for getting out of the city.
“It will be interesting to see how the situation develops in the next few months,” said Martin Desfossés, DuProprio real estate coach. “Over 25% of Quebecers surveyed said they plan to telework after the pandemic, at least most of the time. Before the pandemic, this proportion was only 6%.”
At the moment, the need for additional space to work from home and the fact that teleworking makes it possible to move away from the city (or from the workplace) was still given as a reason by 20% of respondents who moved their buying/selling plans ahead.
On pause while the market stabilizes
More than one quarter of respondents admitted they had pushed back their plans to buy or sell because of the pandemic, and 73% of them did so because of the higher prices and the speed at which properties are selling.
“These future buyers and sellers are waiting until the market calms down or until they know what their post-COVID situation will be before making a move,” said Martin Desfossés. “The Bank of Canada maintaining the key interest rate at 0.25%, possibly until 2023, is still enticing and may encourage some to resume their plans before interest rates rise again.”
Sellers are still in charge in 2021
Survey answers show the intention to sell by March 2022 to be at 26% and to buy, at 57%. Therefore, it seems likely that the current situation will continue and that it will be a seller’s market for a while longer.
Close to two in three respondents said, in the current circumstances, selling a property commission-free has never been easier!
Our team supports you until you sell
DuProprio’s teams of appraisers, real estate coaches and notaries are more reassuring than ever when it comes time to set an asking price that’s appropriate for this market, to develop an effective selling strategy and to carry out a compliant and satisfying transaction.
Want to take advantage of the real estate market and sell your property? Call us at 1-866-387-7677 or watch our informational webinar to find out how our team can support you and help you save thousands of dollars in commission.