What will happen Our Small Businesses in Ontario
Over the course of the next few months, most of us that are small business owners will have to make big decisions to either keep our doors open or to close our doors indefinitely. As we make attempts to move business ahead, the Ontario Government and Federal Governments delay the return to business, and for good reason – the second outbreak of Covid 19 here in Canada. However, most of us in small business are now at a breaking point, with no revenue, continued expenses, overhead of leased premises, staffing and other commitments, the relief aid from the Government or Commercial Landlords cannot come soon enough.
This week, Premier Ford warned against Commercial landlords not accepting the Government of Ontario offering and warned about coming down hard on these “greedy” commercial landlords. We all must pay rent; we are doing our best to keep up with bills, however, the future is not looking as bright regarding a speedy recovery as fast as we would like to see it. In fact, after a pole was taken, 66% of small business were in dire strains and on the brink of bankruptcy.
So, what does this mean for real estate in the province of Ontario? Well, I believe that small businesses that are not able to support themselves will be up for sale, trying to save what they can from losing everything. As well, this will ripple out to include mortgages, loans and other financially bound property and buildings where lender will be owed millions. Meaning without a job and only temporary relief to basically feed yourself and family, affording a mortgage is literally impossible. With Interest rate breaks and lessening the rules for the mortgages has come at a time when most of us don’t have money to spend, mostly because our jobs have been compromised and changed due to the Covid 19 virus.
Over the next 3-6 months, I predict that many houses will be for sale and only a few buyers available, then we will see a shift in the market. This shift has already changed the market with Toronto Real Estate Board reporting that house sales are down in April by 58%. These kinds of trends could impact other cities with change in the market to either an even market neither sellers or buyers’ market or it could shift strongly to a Buyers market. Most people in this shifting market will be in a HOLD position and will not be spending money until they are sure of their jobs, the market, the virus, their families and their future.
In the Commercial side of Real Estate, I believe there will be a down trend, but not as severe as the housing market, but as seen in the past could be an opportunistic market. There will be opportunity for those wishing and prepared to make large acquisitions for the right property at a reduced right price. There are challenges today that are affecting all of us. My only hope is that we are more prepared next time and work in a proactive approach, knowing that this is the second pandemic that was upon us in less than 17 year, on November 16, 2002 SARS was also a hard blow to humanity. I would really like to believe that over the next 5-10 years we are prepared for anything, provincially and federally.
Richard Miller, Broker of Record/Owner
Richart Realty Inc., Brokerage