The aftermath of the coronavirus pandemic has altered our lifestyles, the economy and even the housing sector. A new normal has spawned in the wake of the public health crisis. It might take time to adjust, especially if the virus outbreak lingers as many health experts forecast. This means that face masks, social distancing and working remotely will inevitably be a major part of our lives for quite a while.
As a result, certain trends are beginning to form, including within real estate. Whether it is because office policies have changed or because families think it would be best to steer clear of hyper-dense locations, a lot of households are packing up and moving to rural areas. One of these top destinations is the Kawarthas, with homeowners drawn to the area’s more than 250 lakes and rivers, fresh air and incredible natural sights.
Also known as the City of Kawartha Lakes, the Kawartha real estate market is recovering at a record pace after experiencing a modest decline in March and April. Since then, sales activity, listings and prices have been soaring upwards.
According to the Kawartha Lakes Real Estate Association, residential home sales surged 39.5 per cent in July from the same time a year ago. This also happened to be a new record for July. The median price rose 12.4 per cent to $495,000, up from $488,482 in July 2019. But how could this rural region be skyrocketing amid an economic downturn and in the middle of a public health crisis? Let’s explore.
Why Is the Kawarthas Real Estate Market So Strong Right Now?
A new trend is the growing number of city dwellers escaping the urban centres for the quiet life in suburban locations. This is what is occurring across the Kawarthas, as well as within a plethora of other small towns across Ontario.
“We definitely see the influence of people from the GTA moving here,” said Chiarina Payne, president of Peterborough and the Kawarthas Association of Realtor, in an interview with MyKawartha.com.
Some industry experts were expecting these trends to unfold, given that so many companies have instituted work-from-home policies, allowing many professionals the freedom to work anywhere they want without having to reside close to the city. Plus, with plenty of jurisdictions improving their public transit systems, homebuyers planting roots outside the Greater Toronto Area can still easily commute to the downtown core when they need to.
With demand going through the roof, prices are expected to surge even higher in the coming months within the local Kawarthas housing market. The number of new residential listings is down 18.9 per cent from last year, while the supply of available homes slumped 49.4 per cent. Until new supply comes to market, prices are unlikely to ease.
The other element that is affecting the overall Canadian real estate market is borrowing costs. Earlier this year, the Bank of Canada (BoC) reduced the benchmark interest rate to 0.25 per cent, and the central bank recently cut the five-year mortgage rate to below five per cent. This injection of cheap credit is making borrowing cheap, giving homebuyers more choices and opportunities.
Real estate experts had been warning since the spring that pent-up demand would play a significant role in the industry’s post-coronavirus recovery, whether it is the condominium market in Toronto or a detached house in Kawartha. And sure enough, these forecasted trends have been playing out in real time, with pent-up activity skyrocketing in late spring and well into the summer. But could this continue into the fall season?
Payne is already assuring buyers and sellers that real estate agents will be ready if the second wave of COVID-19 strikes. At the height of the pandemic, realtors kept the sector afloat by embracing digital tools and technology, and employing the necessary public health measures to keep buyers and sellers safe.
Will Kawartha Remain a Top Destination?
The Kawartha Lakes region is more than just a vacation getaway for families in big cities. The Kawarthas affords its residents the chance to trade hectic and fast-paced city living for a slower and quieter lifestyle. Typically, cottage-goers think fondly of the fishing, swimming, kayaking and hiking. But Kawartha also has plenty to offer its year-round residents, including tight-knit communities, little to no traffic congestion, and history dating back to 19th century pioneer days. As the area grows, boutique shops and gastro-pubs have sprouted up along the small-town streets, boosting the local economy.
Industry experts have their eyes glued to the sizzling rural markets, eager to see if this heightened real estate activity will continue into the colder months of 2020.