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The world is in the grip of unprecedented circumstances. As a result of the outbreak of COVID-19, millions of people around the world have been forced to take shelter in their own homes, remaining physically distant from their friends, families and, indeed, the rest of the world. Those shelter-in-place policies have meant bad news for the global economy, as workers lose their jobs or are unable to perform their duties. Amidst all the chaos, the international real estate market is in a state of flux. Things are no different in Canada.
While Canada has managed to avoid a lot of the hardships plaguing nations like the United States, there is still danger hovering in the very air we breathe—at least for the moment. At present, Canada has seen nearly 50,000 confirmed cases and almost 3,000 deaths. That’s a sight better than the United States’ million-plus confirmed COVID-19 cases and almost 60,000 deaths, but the numbers remain alarming. As a result, the nation’s shelter-in-place and physical distancing orders will likely stay in place through the end of June, at the earliest. As Prime Minister Justin Trudeau explained, “This is the new normal.”
As the nation and the broader world adjust to a life indoors, dozens of industries are being forced to make changes to the way they do business. The Canadian real estate market isn’t immune from the turbulence. These sudden changes to our way of life are posing serious problems for Canada’s real estate investors.
Here’s how the industry is responding to COVID-19.
But first, if you want to learn how to protect your investments from situations like the Covid-19 pandemic that may happen down the line, click the link below to book a free strategy call with us at LendCity.
Varying levels of tax relief
Like so many other governments working to curtail the ill effects of the COVID-19 virus, the various provincial governments of the nation have offered varying levels of tax relief for the real estate industry. Of course, the amount of tax relief provided by the local government differs depending on where you or your properties are located.
For example, Ontario has deferred property tax payments anywhere from 60 days until the end of June, depending on the classification of your property. British Columbia has delayed property tax payments for 60 days, as well. Québec and the city of Montreal have postponed interim property tax payments until July. Alberta, meanwhile, has spread out its utility payments from one payment to a series of payments over six months.
The tax relief you receive is far and away the factor that differs most drastically based on the province in which you live. As a result of these irregularities, it’s essential to do your research based on the city and province in which you live and work.
Protecting tenant rights during Covid-19
As a result of the outbreak of COVID-19, hundreds of thousands of Canadians have lost their jobs. More than a million Canadians lost their means of employment in March alone. That sudden, unexpected rise in unemployment has left thousands and thousands of tenants without the means to pay their rent. That’s a significant issue for both tenants and their landlords.
Throughout the nation, however, provincial governments have responded with a sweeping series of legislation. In most cases, provinces have made it effectively impossible for a landlord to evict a tenant due to an inability to pay rent. In the event said tenant is violating public health or safety standards, something can still be done, but most tenants are there to stay for at least the next few months.
In some areas of the country, local governments are enacting similar measures to protect commercial tenants, as well.
Discover How To Buy Unlimited Rental Properties With This Step By Step Guide
Landlord rights exist as well
Some provinces, such as British Columbia and Prince Edward Island, have also taken extra precautions to soften the economic blow to landlords, as well. In both of those cases, a sum of money has been set aside to cover rent, and, by extension, mortgage payments.
Unfortunately, these measures are moving slowly. That said, a lot of Canadian banks have vocally expressed a willingness to work out payment plans that can benefit landlords who find themself short on rent money. It’s a great idea to contact your bank or financial professional to determine if such a deal is right for you.
Slow progress on construction
Before the outbreak of the novel coronavirus, several provinces placed limits on the length of time that a construction project can languish before being pushed forward. These measures helped provinces make sure that construction projects were completed as quickly as possible. Now that a significant number of people are unable to get to their desks, these limitations have been revoked until the COVID-19 outbreak has been controlled.
The translation is that your pending licenses or pending blueprints could stay pending for quite some time.
A potential problem
On an average year, Canada’s real estate system is one of the strongest in the world. In fact, in 2015, one of the most successful investors in the world called a condo in Vancouver “a better store of wealth than gold.” For a long time, that was true.
In recent years, Prime Minister Trudeau and his administration have attempted to navigate away from Canada’s once-powerful oil and gas industry in favour of building a sustainable network of renewable energy and global imports. This economic shift has caused the Canadian oil industry to shrink demonstrably. As oil as fallen, the Canadian real estate sector has risen to the occasion and taken on a significant portion of the country’s economic weight on its shoulders. Indeed, the real estate sector of Canada is the largest in the nation, accounting for 15 percent of the nation’s output.
Now, in the wake of the COVID-19 virus, with more and more rents going unpaid and building plans moving more slowly, the Canadian real estate industry is frozen in place. Should the industry experience a collapse (or even a severe drought), it may take the nation of Canada with it.
But first, if you want to learn how to protect your investments from situations like the Covid-19 pandemic that may happen down the line, click the link below to book a free strategy call with us at LendCity.
