Although there is some preliminary data, it is still far too early to determine the severity of the impact that COVID-19 has had on the housing market. One thing is for certain: landlords are in an especially vulnerable position during this fragile time.
Prior to this pandemic, everyone was trying to get into the Airbnb business. Owners could make a larger profit by renting a home for several days or weeks at a time as opposed to a traditional year-long lease. But do to COVID residential landlords who have numerous rental properties and who chose to rent them out on the short-term rental market are suffering.
With a nationwide lockdown and mobility restrictions in place, the short-term rental business was forced to come to a quick halt for the time being leaving many unsure of what is to come.
Airbnb host revenue is at an all-time low as people continue to stay home. Depending on the circumstances, mortgage payment deferral options may not be available to owners of investment properties. Other tenants living in condos do not want people to come and go daily. Ontario and Quebec chose to temporarily ban short-term rentals across their provinces. Now, some investors are attempting to search for long-term tenants. Others are questioning if they will eventually be forced to sell if they can no longer afford to pay.
There are mixed predictions of what the market is going to look like once lockdown ends. Renting is how many generate additional income, which is needed during this economic crisis. Others have pointed out that there may actually be a silver lining for prospective homeowners looking to buy.
It is no secret that there has been an inventory shortage in the past. Affordable housing advocates have argued that Airbnb’s increased housing costs for residents have resulted in condo tower ‘ghost hotels’ with places being left empty a large chunk of the time.
If these restrictions continue and this is a new reality, hosts may be forced to sell, which means new inventory for some and empty pockets for others.
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