The Toronto Regional real Estate Board (TRREB) today announced the results of real estate activity in the Greater Toronto Area for the first half of April, providing a vital insight into the impacts of the COVID-19 pandemic.
In a break from the standard procedure of only reporting results at the end of the calendar month, the board released sales information for the first 17 days of April “in order to provide some guidance on the impact of COVID-19 on the Greater Toronto Area housing market.”
The results showed that there were 1,654 home sales in the Greater Toronto Area between April 1 and April 17 – representing a decrease of 69% compared to the same period last year. The segment of the market that saw the greatest year-over-year decline in sales was condo apartments, which dropped 72% to 388 sales. The least affected in percentage terms was semi-detached homes, with a drop of 64.4% (187 sales) compare dot the same period last year.
The drop in sales numbers compared to last year was reported all across the Greater Toronto Area for all segments of the market. For market areas and segments with more than 10 sales recorded, the year-over-year decreases ranged from 44.7% for semi-detached homes in Durham Region to 76.7% for condo apartments in Peel Region.
While sales were down across in all areas, new listings also dropped by similar amounts meaning overall inventory didn’t see a big change. A total of 3,843 new listings were recorded in the first 17 days of April, marking a 63.7% decrease from the same period a year earlier. Condo apartments saw the smallest drop in new listings, 54%, meaning inventory will be up slightly for that segment.
With inventory not yet affected, prices remained relatively stable. The average sale price for the period was $819,665, just 1.5% lower than the average price recorded in the same period a year earlier. Detached homes were the segment with the biggest year-over-year price decrease, dropping 4.6% to $990,543.
In the City of Toronto, the average sale price was $885,371 – a 3.7% decrease year-over-year. As with the GTA as a whole, the detached segment saw the biggest decrease in Toronto as it was down 9.1% to $1,257,916. With only 178 transactions for detached properties, it is hard to say whether this is a genuine decrease in price or just reflective of the fluctuations possible with a smaller sample size.
Interestingly, not all segments saw drops in sale price. Semi detached and townhomes in Durham Regions had price increases of 6.3% and 8.1% year-over-year, while detached homes in South Simcoe rose 24.4%. However, once again there is a big caveat as the low numbers of transactions mean fluctuations are not necessarily representative of the overall picture.
Talking about the effects of the COVID-19 pandemic and subsequent lockdowns, TRREB President Michael Collins said: “The state of emergency measures currently in place, including the necessary enforcement of social distancing, has impacted the real estate market in many ways. Home buyers and sellers have concerns about the economy and indeed their own employment situations. On top of this, many buyers and sellers are avoiding any type of in-person interaction. In the condo market in particular, individual condo corporations have curtailed entry for non-residents.”
Mr. Collins then spoke of his expectations for the market once the current restrictions start to be eased: ““All of the COVID-19 related issues and measures have translated into a temporary drop in the number of transactions – a drop that will persist until we experience a meaningful and sustained decline in the number of cases. However, once recovery begins, it will likely accelerate in earnest as buyers seek to satisfy pent up demand that will build up over the course of the spring and at least part of the summer.”
The TRREB report then suggested we may see a return to a more active market some time in the summer, stating that “if public health forecasts assuming strong social distancing measures play out as expected, we will likely start to see improvement in market activity in the summer. Recovery will accelerate through the fall, as social distancing measures are substantially relaxed, a large number of people return to work from furlough and home buyers take advantage of very low borrowing costs that will remain in place to spur economic recovery.”
Many buyers and sellers will be eager to see how accurate those predictions turn out to be. If the outlook is accurate then it could be a much cheerier second half of the year for many people.