Home sales in the GTA dropped by 67% this April, while transactions in the City of Toronto fell by 68%. New listings and real estate prices also experienced declines as a result of the uncertainty surrounding COVID-19.
According to the Toronto Regional Real Estate Board (TRREB), home sales in the Greater Toronto Area plunged last month as a result of the coronavirus crisis. Compared to April 2019, when 9,005 residential transactions were recorded, April 2020 saw only 2,975 sales, down 67%. New listings decreased as well by 64%, from 17,212 a year ago to 6,174 this April.
Although GTA home prices remained flat year-over-year, they fell 11.8% compared to March numbers. Jason Mercer, TRREB’s Chief Market Analyst, stated for Globe Newswire:
“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. 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 City of Toronto alone, home sales plummeted by almost 68% year-over-year, while average prices fell 2.5%, from $904,199 in April 2019 to $881,424 this April.
The GTA rental market also experienced a decline relative to a year ago. The average one-bedroom rent dropped 2.7% to $2,107 and the average two-bedroom rent fell 4.1% to $2,705. The condo rental inventory also decreased by 57.9% for one-bedroom units and by 54.4% for two-bedroom units.
Housing Market to Recover When the Economy Starts
John DiMichele, Chief Executive at TRREB, believes past recessions cannot be treated as accurate guides for how the current situation will unfold. He stated for Global News:
“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.”
On this note, provincial, local and federal officials are cautiously planning to relax or remove the restrictions that were implemented in mid-March. Nevertheless, Ontario currently still restricts non-essential businesses to slow the spread of the coronavirus.
Real Estate Agents Rely On Technology
While open houses are out of the question and both buyers and sellers are hesitant to enter the market, real estate experts have found new ways to showcase properties.
According to TRREB President Michael Collins, members of their staff have been using live video streaming to replace in-house visits:
“The necessary social distancing and economic impacts associated with COVID-19 clearly impacted home sales and listings throughout April 2020. 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”.
He expects an increase in the use of these new technological tactics as social distancing will probably stay in place for the foreseeable future.
As the coronavirus outbreak continues to impact Toronto real estate, more innovative measures and solutions will rise to help balance the market. If restrictions are slowly relaxed and ultimately removed, we can expect a revival of the housing market as buyers and sellers regain confidence in the market.