St. Catharines’ Chris Lamb Explains How COVID-19 has Impacted the Real Estate Industry
With COVID-19 taking a toll on just about every aspect of our daily lives, some industries have struggled more in its shadow than others. The real estate industry is definitely facing a mixed impact. Whether you’re a renter, a property developer, a realtor, or are purchasing a home, you are affected by the pandemic in some way.
Chris Lamb of St. Catharines, Ontario, is a property developer and investor. He is a first-generation builder that’s enthusiastic and excited about new opportunities. He is interested in building affordable housing communities and investment properties in the Niagara Region. He shares how different real estate properties have been affected by the pandemic.
Commercial Real Estate Impact
To get a clear idea of the impact of the coronavirus pandemic on the real estate industry one has to look at all the retailers who had to close shop at the height of the lockdown a few months back. With no customers and sales plummeting, many business owners had to let workers go. Others wondered how long their savings would last or whether they could afford to keep their place of business. Even the usually bustling tourist spots look deserted. And months after the economy has opened, the signs of recovery have been less than encouraging. This has put a dent in the real estate market as property values have plummeted.
Beyond that, the demand for commercial real estate everywhere has faced challenges, notes Chris Lamb of St. Catharines. Globally, in the first six months of 2020, direct commercial real estate investment fell by 29% year over year. The average vacancy of commercial real estate across Canada has definitely taken a hit.
According to a recent report, the average vacancy of offices across Canada was 10.8% at the end of June, a rise of 50 bps. Experts say that although the recovery of the commercial real estate market will be uneven, it is expected to recover within the next two years.
Chris Lamb on Residential Real Estate
While the COVID-19 pandemic has undoubtedly caused a lot of uncertainty and the future is unpredictable, the impact on residential real estate is somewhat mixed. While the housing market faced a slow Spring as open houses were cancelled and people adapted to lockdowns, it has definitely picked up. Over the past 10 years, condo living has grown in popularity with new buildings going up and units being in high demand. The pandemic however, has caused many to reconsider moving into a smaller unit as many families have shifted to working from home, says Chris Lamb. In fact, the shift has caused many to wonder if an “exodus” from major cities like Toronto and Vancouver would occur and if more people would move to suburbs (like St. Catharines) as they don’t expect to return to offices anytime soon.
In a sense, the residential real estate market when it comes to homes is booming in Canada and despite the recession, bidding wars are driving home prices up. In September, the average price of a home sold on the Canadian Real Estate Association’s MLS service was $604,000, setting an all-time record high and representing an increase of over 17% in the past year. In addition, according to realtors, it was the busiest September on record when it comes to the volume of homes sold.
The talk about rent relief has also sent ripples of hope in the housing market. Many renters both in the residential and commercial sectors are trying to negotiate rent relief from the property owners to keep things afloat. Other measures such as flexible rent payments are intended to help both renters and small business owners cope with the economic impact of the pandemic, says Chris Lamb.