Canada’s current economic environment remains the “most housing-friendly recession” ever, with remarkable opportunities for mortgage brokers likely to manifest by mid-2021, according to a new analysis by CIBC’s Benjamin Tal.
While the national market was frozen for around two months last year, it took off once the initial lockdowns eased – and never looked back.
“The question is how sustainable it is. I think it is sustainable because of the fundamentals, but we have to remember that currently, we are in a double-dip recession,” Tal said in an interview with the Financial Post.
Tal said he believes that the spring and summer real estate markets will be extremely strong, with most of the softening taking place in the condo space, where a number of markets are already seeing reduced demand and increased supply.
Noting that every crisis is a trend accelerator, Tal said the trend of people moving away from cities was in place “well before the pandemic” and that affordability was the major driver of this. Many Canadians no longer feel that it makes sense to pay the sky-high costs of living in an urban core and closer to work now that they have been working from home since the pandemic took hold in Q2 2020.
But Tal warned that this state of affairs will not last forever.
“I think that the office model is not dead. People will be going back to the office, maybe not five days or even four days a week, but they will have to commute,” Tal said, adding that such a shift will eventually give those who have not yet moved out of large urban markets second thoughts about doing so.