Canadian Economic Response to COVID-19

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Questions and Answers

What was included in the Canadian government's initial stimulus plan in March 2020?

$10 billion in business grants

$50 billion in tax deferrals

$82 billion in mortgage loans

$27 billion in direct support (correct)

Which measure was taken by big Canadian banks in response to the economic impacts of COVID-19?

Investments in new construction projects

Immediate loan forgiveness for small businesses

Interest rate increases on mortgages

Mortgage payment deferrals for up to 6 months (correct)

What was one of the intended outcomes of the Canadian government's plan to purchase insured mortgage pools?

To provide liquidity to the banks (correct)

To decrease home prices

To reduce interest rates for consumers

To increase housing market competition

Which group did not receive immediate relief in the early stimulus and relief announcements?

Renters comprising almost 33% of Canadian households Signup and view all the answers

What type of interventions are likely needed to support the real estate sector during the economic difficulties caused by COVID-19?

Mortgage-loan forbearance and moratoriums on rental evictions Signup and view all the answers

What was the primary objective of the Home Affordable Modification Program (HAMP) launched in 2009?

To reduce monthly payments for struggling borrowers to 31% of their income. Signup and view all the answers

Which financial relief measure was announced by the government in 2010 to assist homeowners?

$7.6 billion Hardest Hit Fund. Signup and view all the answers

Why is it important for mortgage payment relief to extend beyond homeowners to renters?

Renters’ financial situations are often more fragile than those of homeowners. Signup and view all the answers

What are potential costs associated with extending mortgage forbearance duration?

Foregone interest and higher owed principal. Signup and view all the answers

What is a potential advantage of choosing forbearance over foreclosure for financial institutions?

Forbearance generally incurs lower costs than foreclosure for the economy. Signup and view all the answers

What is one consequence of the uncertainty brought on by the pandemic regarding real estate transactions?

Buyer's remorse due to perceived overpayment Signup and view all the answers

How did the Canadian government respond financially to the COVID-19 pandemic?

They created a financial package exceeding several hundred billion dollars. Signup and view all the answers

What role does the deposit play in a real estate transaction?

It is held in escrow by the seller's lawyers Signup and view all the answers

What might change between the time an offer is accepted and when a deal closes that can affect buyers?

Market conditions Signup and view all the answers

In times of crisis, why might homeowners seek relief from mortgage payments instead of relying on home equity?

Homeowners often lack sufficient equity to borrow against. Signup and view all the answers

What is one significant challenge that small businesses face during social distancing measures?

Immediate declines in cash flow affecting rent or mortgage payments. Signup and view all the answers

How many homes were sold across Canada in the first two months of 2020 according to CREA data?

65,494 homes Signup and view all the answers

What financial issue might buyers face if prices fall significantly before closing?

Increased loan-to-value (LTV) ratio Signup and view all the answers

What is a major concern for buyers attempting to sell their current residence simultaneously?

There may be delays in closing both transactions Signup and view all the answers

What dilemma might arise for sellers if firm sales fail to close?

They may face financial risks Signup and view all the answers

What aspect of real estate transactions can be directly influenced by economic conditions during a pandemic?

Investments intended for down payments Signup and view all the answers

What percentage of Toronto Community Housing residents face mental health challenges?

23% Signup and view all the answers

What is the estimated residual demand for student housing in Canada?

416,000 beds Signup and view all the answers

Why do local housing market indexes matter more to buyers?

They provide insights into neighborhood-specific dynamics. Signup and view all the answers

What factor is contributing to the increasing demand for student housing in Canada?

Growth in full-time student enrollment Signup and view all the answers

What is suggested by the Canadian Real Estate Association's (CREA) report on housing markets?

Local markets adjust independently based on supply and demand. Signup and view all the answers

Which factor prevented rapid price inflation in Ottawa's housing market?

Stability from federal government employment Signup and view all the answers

What was the average (nominal) housing price in Toronto reported in April 2019?

$820,148 Signup and view all the answers

What aspect of housing markets does the House Price Index (HPI) account for?

Seasonality and differences in housing types and sizes. Signup and view all the answers

What is a consequence of falling housing prices in Vancouver?

Decreased buyer confidence. Signup and view all the answers

Which market saw the highest increase in sales in April 2019 according to CREA?

Toronto Signup and view all the answers

What factor contributed to the unique structure of the Montreal housing market?

Low-rose multiplexes and high rental demand. Signup and view all the answers

What has happened to the demand for affordable housing in growing cities?

It continues to rise. Signup and view all the answers

What recent regulatory change has affected mortgage applications in Canada?

Higher mortgage qualification thresholds. Signup and view all the answers

What is the main issue with the national-level view of housing markets according to CREA?

It fails to address local variations adequately. Signup and view all the answers

Which of the following statements about residential real estate transactions in Quebec is accurate?

Standard residential transactions do not include force majeure provisions. Signup and view all the answers

What is the main reason given by Mark Weislender regarding real estate transaction closures?

Government registration system shutdown or lender funding issues. Signup and view all the answers

What percentage of businesses in Canada are classified as small businesses?

73.4% Signup and view all the answers

During the COVID-19 pandemic, which of the following real estate activities saw a significant decrease?

In-person home visits. Signup and view all the answers

How did the National survey indicate small businesses felt about the Canadian Emergency Business Account (CEBA)?

They were critical of its debt implications. Signup and view all the answers

What change did Justin Trudeau announce concerning the CEBA in May 2020?

Decrease in qualifying payroll minimums. Signup and view all the answers

Which risk remains critical for buyers beyond virtual tours?

Home inspections. Signup and view all the answers

What was the impact of the Great Lockdown as noted by the IMF?

It resulted in global losses estimated at $9 trillion. Signup and view all the answers

What emerging practice is being used for real estate transactions to adapt to social distancing guidelines?

Digital signatures for documents. Signup and view all the answers

What has been a major concern for landlords during the pandemic?

Defaulting tenants and possible job losses. Signup and view all the answers

Which of these practices was adopted for home inspections during the pandemic?

Inspectors wore protective gear and collected health information. Signup and view all the answers

What might be a necessary addition to buyer and seller agreements in light of recent events?

Clauses that indemnify them if a deal fails to close. Signup and view all the answers

What was the effect of COVID-19 on housing market listings and sales?

They slowed dramatically. Signup and view all the answers

What may cause a failed transaction in real estate to impact other transactions?

Unexpected last-minute developments Signup and view all the answers

What is one of the main benefits of urbanization economies?

External economies of scale through productivity Signup and view all the answers

How has the pandemic affected student learning in higher education?

Classes transitioned to online formats Signup and view all the answers

What has been a critical factor for the success of metropolitan downtown areas?

Efficient mass transit systems Signup and view all the answers

How did the COVID-19 pandemic affect office occupancy in downtowns?

A halt to daily commutes and remote work Signup and view all the answers

What was the consequence of the coronavirus on the New York Stock Exchange?

It shut its doors, affecting trading practices Signup and view all the answers

What trend was observed in employment growth in downtown Toronto according to a 2018 report?

Hyper-concentration of knowledge-based activities Signup and view all the answers

What effect has social distancing had on the nature of cities?

Initiated discussions about city shape and size Signup and view all the answers

What is an impact of working from home on employer-employee relationships?

Potential long-term changes in dynamics Signup and view all the answers

What can reduce pressure on central places in urban areas?

Advancements in information and communication technologies Signup and view all the answers

What has been a traditional motivation for businesses to choose downtown locations?

Exorbitant rental costs assumed to aid visibility Signup and view all the answers

What significant change has the pandemic brought to the way people interact?

Limited interactions and increased indoor living Signup and view all the answers

What strategy are businesses employing in response to COVID-19 regarding their locations?

Re-evaluating costs versus benefits of downtown locations Signup and view all the answers

Study Notes

Real Estate Management Study Notes

Real estate management is a broad field
It covers a wide range of topics, including
The real estate industry
Agents in the real estate industry
Housing prices
Housing affordability
Demographics
Real estate markets
Policies and strategies
Current issues in the market

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Description

This quiz explores the Canadian government's stimulus plan initiated in March 2020, as well as the responses from major banks and the implications for the real estate market. It also covers prior financial relief measures and the importance of extending support to both homeowners and renters during economic distress.