A report from the Vancouver Sun in Canada. “The advertised rent for a two-bedroom apartment has plunged by 15 per cent in the city of Vancouver, one of the biggest drops in Canada, as COVID-19 makes its bewildering way through the economy. The average rent demanded for a two-bedroom apartment in the city of Vancouver dropped by almost $450, to $2,478 a month. Rohana Rezel, a housing advocate, is part of a group monitoring Craigslist and other real-estate forums. They’ve discovered short-term rentals are ‘collapsing’ and hundreds of units are now switching to long-term rentals.”
“‘People offering their places for rent on Craigslist are now blatantly saying it used to be an Airbnb. They’re boasting it was rated five stars,’ says Rezel, who adds that many such landlords started off charging outlandish long-term rents, which they were forced to slash.”
“As in many cities around the world, many owners in Vancouver and Toronto are also feeling pressure to somehow off-load their homes, either because they have lost wages or are going into deeper debt. But they’re in a bind, because it’s no longer a house-seller’s market. Some would-be sellers are trying to wait out the downturn by renting their places, thus also increasing supply.”
From Blog TO in Canada. “Rent prices continue to plummet in Toronto as the global pandemic wears on, both hampering demand among those who’d rather not move for financial or safety reasons and boosting supply as Airbnb-lords transform their short-term rental units into permanent, long-term housing. A new report shows that the average rental price across all property types in the city fell significantly, dropping 5 per cent both month over month and year over year.”
“Broken down by unit type, size and region, however, we can see even steeper declines. Purpose-built rental apartments within the City of Toronto, for instance, fell a whopping 11.2 per cent between March and April of this year to reach a current average of $1,945. Size-wise, larger units experienced the most significant price drops across both the rental apartment and condo apartment markets. Suites rounded to 1,300 square feet in real estate listings were found by Bullpen to have dropped 20.2 per cent between March and April of this year.”
“Within Toronto proper, condo apartments in areas known to be flush with short-term rental units (read: Airbnbs) have shown the largest price declines per square foot, month over month. ‘Some major developments experienced noteworthy declines including Three Hundred on Front Street and Massey Tower on Yonge Street at -13% monthly, as well as Smart House Condos on Queen Street at -11%, and 87 Peter at -7%,’ reads the torontorentals.com report.”
The Globe and Mail in Canada. “As Canada’s manufacturing and resource industries declined, governments looked to the real estate sector as an engine of economic growth. That made the Bank of Canada deathly afraid of removing the punch bowl of abnormally low interest rates, creating a property price bubble. The coronavirus pandemic looks like the pin.”
“Now, most of those investor-owned condos in Toronto, Vancouver and Montreal that once fetched $200 a night or more on Airbnb are generating negative cash flows. Many of the 740,000 mortgage holders who have deferred payments face grim prospects in the coming months.”
From Insauga in Canada. “A report from Zoocasa has found that the average housing price has dropped in 13 of 20 regional between February and April. According to the findings, every market experienced a decline in sales during this timeframe—the most densely-populated areas experience the most significant sales declines. Further, Ontario’s regional markets experience the most significant decline when it came to average prices.”
“In ascending order, they were Hamilton-Burlington, the average price decreased by five per cent—$32,255—to $614,412; Ottawa, the average price decreased by 6.3 per cent—$34,652—to $510,139; and the GTA, the average price decreased by 10 per cent—$88,898—to $821,392.”
The Daily Mail on Australia. “Now is the time for potential home owners to enter the Melbourne property market and snap up a bargain for thousands less than the asking price. Bargain hunters are taking advantage of ideal buyer’s market conditions during the coronavirus crisis, with prices slashed by up to $100,000 on average in some suburbs. There’s even better news for those with the cash to splash on a luxury mansions with an opportunity to negotiate millions off the asking price.”
“Prices could be slashed even further following the heavily discounted sales of homes earlier this year before the pandemic hit. A Chirnside Park mansion in the city’s Yarra Ranges which hit the market in late 2018 finally sold in January at a steal for $2.55million – half the $5-$5.5 million asking price.”
The Australian Financial Review. “One in three renters face housing stress and are at risk of defaulting their rental payments, while more investors are selling their rental properties before prices drop even further. The number of tenants who are struggling to pay rent, mostly due to a loss of income as a result of the lockdown, has climbed by 4.3 per cent to 1,796,216 nationally in less than two months despite the JobKeeper and JobSeeker assistance, a new report shows.”
“As the risk of rental arrears rise, Digital Finance Analytics principal Martin North said more investors are likely to offload their investment property. ‘Despite record low interest rates and mortgage reprieve by the banks, almost one in eight investors (12 per cent) are seriously considering selling up before prices and rents fall further,’ he said. ‘In April, only 8 per cent of landlords were thinking of putting their rental homes for sale.’”
“Mr North said as more investors struggle to cover their costs as rents fall and vacancies rise, more rental properties are set to come into the market, which could put downward pressure on property prices. ‘I think the rental sector is facing a major shock, now, but one which will reverberate down the next couple of years and adversely impact the financial status of many households,’ he said. ‘From those renting, caught by cash flow issues, through to property investors who are waking up to the fact the property investing is hard work.’”
The Property Observer in Australia. “A Melbourne residential unit has been listed with a price guide which could trigger a loss of up to $96,000 on its 2014 purchase price. Located at 4310/80 A’Beckett Street – within the MY80 building – the apartment features two bedrooms, two bathrooms, and a car space. It comprises 57 square metres of internal floorspace. It sold in 2014 for $786,000. The current listing gives a price guide of $690,000 to $720,000.”