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The past few months have been a rollercoaster ride.

COVID-19 has impacted the Canadian economy, just like it has affected other economies across the globe.

The Canadian government was quick to launch emergency relief measures to cushion the blow that many households and businesses were going to face.

However, most of these measures are now coming to an end. For instance, the Canada Emergency Response Benefit (CERB) was extended for another two months in July 2020 and is now coming to an end for most Canadians.

Similarly, the Canada Emergency Wage Subsidy (CEWS) for businesses will also be available only until the end of December 2020.

As these measures come to an end and the economy begins to reopen, we analyze the current state of the real estate market and share predictions for the future.

Economic Outlook and New Regulations

In their recent press release, the Bank of Canada announced that the overnight rate was being maintained at the effective lower bound of 0.25%.

Economists and analysts in the financial community are in agreement that the interest rates in Canada will continue to remain low for the foreseeable future, in order to facilitate economic recovery and encourage investment.

Though, when it comes to the mortgage industry, Canada Mortgage and Housing Corporation (CMHC) implemented a tightening of mortgage rules in Q3.

CMHC reduced the Gross/Total Debt Servicing (GDS/TDS) ratios, raised the minimum credit score requirement, and excluded non-traditional sources of down payment.

In Q4, we will have an opportunity to see how the mortgage and real estate industries react to these changes.

Real Estate Market Outlook

What do these changes mean for the real estate market?

According to a recent report by CMHC, this means that sales and home prices would not rebound to pre-COVID levels until 2022.

CMHC further stressed that the timing and extent of recovery will vary from region to region. For instance, Toronto, Montreal, and Ottawa are expected to recover sooner than other regions in Canada.

While the CMHC predictions may seem bleak, many real estate organizations are confident that the bounce back will happen soon.

For instance, a survey from Royal LePage indicated that the aggregate price of a home in Canada actually increased by 6.8% year-over-year in the second quarter of 2020.

Mortgage Rates Are Unprecedently Low

There also have been significant developments in the mortgage industry.

We are now seeing lenders offer incredibly low rates. HSBC Canada, for instance, was offering a 5-year fixed default-insured mortgage for 1.99%. Other lenders seem to be following suit.

These lower interest rates are expected to encourage home buyers to apply for mortgages as well as homeowners to look into refinancing options.

Resources to Help Keep You Up to Date

To help you keep track of the changing conditions and provide you updated market information, we have created data-backed resources that can help you plan ahead:

Where do you think the real estate market is headed? We would love to know your thoughts. Share them with us on FacebookTwitter, and LinkedIn.

Learn how you can leverage our solutions to stay competitive in an ever-changing mortgage market. Call 1-855-787-8439 or visit