The Best is Yet to Come
2020-06-01 | 13:22:08
Happy June 1st everyone!!
As we enter into a new month with expectations of better weather and loosening restrictions to our physical distancing, let us remember those who will continue to be on the various positions battling this pandemic on the front line. Their commitment, dedication and sacrifice continue without pause.
Our heroes should feel an enormous sense of pride and accomplishment to the economy’s initial phases of re-opening and our ability to feel cautiously optimistic to better days ahead.
Though news reports continue to push negative articles forecasting how bad things are yet to be – as news reports do - I am happy to be working with wonderful people whom are either purchasing their first home and, in some cases, their third home.
I have always been a true believer that homeownership here in the GTA and Greater Golden Horseshoe is one of the most important factors to sustain the wellbeing and stability of our region, if not country as a whole.
Are there important issues that need to be addressed and resolved?
Yes!!
Environmental concerns, automobile congestion, affordable housing, homelessness and other maladies in our great society need more attention than they are currently receiving. However, without a strong economy, that many will say perpetuate our problems, it is difficult to imagine where we would get the resources required to fix these issues without a strong economy.
In Canada, and in Southern Ontario in particular, homeownership remains as one the most important goals to achieve and challenges to overcome for many. Most still believe, as I do, that over the long term, real estate is one of the most safe investments and vehicles for financial growth that we have at our disposal.
There is no doubt that 2020 was going to be a banner year for real estate activity in the GTA and our surrounding areas. Immigration, demand and relatively short supply were beginning to drive home prices up and up.
With COVID-19, immigration has slowed, demand has slowed and people are simply not listing their home as they would have wanted to until the veil of uncertainty caused by this pandemic is lifted.
But there remain people that had purchased their home before our economy was forced to shut down due to the pandemic.
Some had sold their home and are waiting for their new homes to be completed or, their move in date to arrive.
One thing for certain that is not a revelation – people will always need a home – under their ownership or by renting.
It may be true that some real estate speculators who were hoping that their purchase in certain areas would pay off in the short term will be negatively affected.
However, this is a risk that can easily be mitigated. If speculators also factor in the possibility of an economic downturn and, in the event of such a downturn, they are able to sustain their investment through other strategies, over the long run, they too will save and prosper from their investment.
Since World War 2, CMHC confirms that the average house value in Canada has increased by over 5% annually over 25 year periods. This includes the 2008 global financial meltdown when, no surprise, predictions of a housing market collapse never happened.
For homeowners who have purchased a home in the GTA and periphery over even the last 5 years, you are still in good shape if your employment future is secure and your personal debt has been managed prudently.
I dare say that managing personal debt is more important than the income one earns.
When people ask where I think home prices are heading, I tell them there are so many factors to consider. Perhaps with the slowing of immigration, the increase in supply of new home construction may give buyers a better opportunity to enter into home ownership. Coupled with massive government spending and probable slower than anticipated economic recovery, borrowing rates should remain low for a prolonged period ahead.
Others rightfully say, if I have to sell my house, it only means that I have to buy another one. Again, if you had purchased your home years ago, the likelihood of you staying put where you are is the most likely scenario. With nearly 70% less sales in homes in April of 2020 compared to April 2019 and, very short supply of listings, people are not currently feeling pressured to sell despite this pandemic.
Of course, things can change for the worse. But you should not think about things getting worse. Rather, think of how your personal practices can help you and your loved ones even if this negative period is prolonged.
And of course, things can also change for the better. Eventually they will.
The negative economic impact has certainly brought certain sectors of our economy to its knees.
We feel for all of those impacted but we know that eventually we will get through this to begin a new normal – a new way to embrace doing things not in the manner that we traditionally did them.
I feel optimistic to the changes that are coming.
Many believe that inevitable societal changes have been sped up by as much as 25 years in certain sectors of industry, production and distribution.
Experts in urban planning are sharing ideas of the good that can be created with what others believe will be empty spaces caused by working from home or companies simply restructuring their traditional practices.
We are experiencing less polluted skies and waterways around the globe.
Less traffic will cause some relief to the economic cost in maintaining infrastructure and create a more acceptable public transportation system than we currently have without major changes.
New construction policies, materials and methods are also gaining momentum to provide better practices in the development of efficient homes for every price point.
We are focusing less on material goods and more on the responsibility we have in maintaining secure fiscal policies within our own lives.
And with all of the changes coming, owning a home or living in one will never change.
Continue to believe and see the good in what is to come.
The growth of our population has caused certain undeniable problems in the way we live, work, congregate and use our available spaces.
I strongly believe that whether the economic recovery is sooner or later, the paradigm shift required from how we once thought and did things will be possible only with a vibrant economy destined to grow.
Wishing you all a great week!!
Marco
