Home sales plummet 69% in April as coronavirus shutdowns hit housing market. GTA area home sales off a cliff, real estate experts say that while prices may stall as people stay home, they will pick up where they left off once the crisis passes. Sales started falling off a cliff since mid-March when the provinces restricted activity and implored residents to stay at home. As well, regional real estate boards warned realtors against holding open houses, and banks started tightening their underwriting standards for borrowers. Despite the steep drop-in activity, home prices rose in semi-detached houses and townhouses segment.
GTA area, the largest residential market in the country, 2,975 homes sold, down 67 per cent compared with the previous year, with condo sales recording the steepest drop, at 72 per cent. Weekday sales remained within a relatively steady range during the month, averaging 130 per day.
Price increases in semi-detached houses and townhouses offset decreases in condos and detached houses. As the average selling price for April 2020 transactions was $821,392 – up by 0.1 per cent compared to the average price of $820,373 reported for April 2019. The semi-detached and townhouse market segments experienced annual average price growth above the rate of inflation. The condominium apartment and detached segments experienced year-over-year price declines on average.
The prices continued to rise as the number of new listings continued to fall, decreasing 60 per cent in April compared with last year. Home sellers became very uncomfortable with having people come into their homes for showing.
In the GTA region, New listings amounted to 6,174 in April 2020 – down on a year-over-year basis by a similar rate compared to sales, 64%.
" 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 " said, TRREB’s Chief Market Analyst.
Condominium Apartment Rental Market
TRREB is also providing summary condominium apartment rental market statistics for April 2020. Conditions in the GTA rental market have also changed since the first quarter of 2020.
• Rental transactions reported through TRREB’s MLS® System were down on a year-over-year basis in April for both one-bedroom and two-bedroom condominium apartments.
• One-bedroom condominium apartment rental transactions were down by 57.9 per cent to 754; two-bedroom rental transactions were down by 54.4 per cent to 489.
• Average rents for one-bedroom and two-bedroom apartments were down on a year-over-year basis in April 2020 as well. The average one-bedroom rent was $2,107 – down 2.7 per cent compared to April 2019. The average two-bedroom rent was $2,705 – down 4.1 per cent compared to April 2019.
This is unprecedented time. 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. 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.
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