Toronto and area real estate sales numbers continue to plummet, but a corresponding drop in price has not happened. And in some sectors of the market, prices have even increased higher than the rate of inflation, showing the market still has some resilience.
This morning the Toronto Regional Real Estate Board (TRREB) issued its latest market report based on 2,975 transactions conducted through the board’s MLS system, down 67 per cent compared to April 2019.
“The necessary social distancing and economic impacts associated with COVID-19 clearly impacted home sales and listings throughout April 2020,” said Michael Collins, president of TRREB. “However, realtors have been able to facilitate some transactions on behalf of buyers and sellers through the use of innovative techniques including virtual open houses. TRREB has also provided a live stream virtual open house option on member listings featured on our public websites, and I would expect the use of these innovative techniques to increase as some level of social distancing remains in place for the foreseeable future.”
The number of new listings are also down more than 64 per cent, year-over-year, which could explain why there has not been an equivalent drop in price.
Some on social media are suggesting an uptick in transactions is already underway.
Toronto home and condo showings are slowly trending upwards; also seeing an increase in offers. #TorontoRealEstate
— Ryan Roberts (@TORealEstate) May 5, 2020
An increase in months of inventory suggests buyers as slowly re-entering the market – but not all regions across the Toronto area are picking up at the same speed. Here are the latest real estate sales data for the week ending April 25th.
Learn more: https://t.co/iioVm9s5cr
— Alfred Martinelli (@askmartinelli) May 5, 2020
According to TRREB information, the average selling price across all housing types and throughout the board area in the GTA in April was $821,392, which is up by 0.1 per cent compared to the average price of $820,373 reported for April 2019.
The semi-detached and townhome market segments, traditionally first-time homebuyer territory, are up more than the rate of inflation. While detached and condo prices fell.
“When thinking about home prices, it is important to remember that the pace of price growth is dictated by the relationship between sales and listings,” said Jason Mercer, TRREB’s chief market analyst. “So, while the onset of COVID-19 has understandably shifted market conditions and resulted in average selling prices coming off their March peak, there has continued to be enough active buyers relative to available listings to keep prices in line with last year’s levels.”
In the rental market, TRREB noted that transactions are down more than 50 per cent for both one-bedroom and two-bedroom condominium apartments and unlike the home market, prices have also fallen. The average rent for one-bedroom units is down 2.7 per cent and 4.1 per cent for two-bedrooms when compared to April 2019.
The rental market in #Toronto is changing by the day. Freaking-out #airbnb-ers are dumping their empty units onto the market since the travel sector is dead. Many of these are ‘professional hosts’ with multiple units and mega-financing.🦠🏢📉💸 $HCG $EQBhttps://t.co/MovqpJ4IPK
— Dr_Silberschmelzer (@silberschmelzer) May 5, 2020
Like most other industries, real estate has suffered greatly as a result of the COVID-19 pandemic and although some business is being conducted the only long-term solution is to reopen the economy.
“These are unprecedented times. Past recessions and recoveries do not necessarily provide the best guide as to how the housing market will recover from the impact of the COVID-19 pandemic,” said TRREB CEO John DiMichele. “A key factor for the housing market recovery will be a broader reopening of the economy, which will result in an improving employment picture and a resurgence in consumer confidence. To this end, it is reassuring that the province is taking measured and carefully monitored steps towards safely opening up some parts of the economy.”