Toronto home sales sink 67% in April as pandemic freezes activity
May 6, 2020 | Posted by: Mike Garganis
Canada's largest housing market went into a deep freeze last month as COVID-19 pushed buyers and sellers to the sidelines.
There were 2,975 property sales across the Greater Toronto Area in April, representing a 67 per cent year-over-year plunge in activity, according to data released Tuesday by the Toronto Regional Real Estate Board (TRREB).
In the uncertain environment created by the pandemic, homeowners balked at selling — with active listings sinking 41 per cent year-over-year.
The average selling price, meanwhile, was flat on a year-over-year basis at $821,392; however, that marked a nine-per-cent drop from March’s average of $902,680.
“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 Chief Market Analyst Jason Mercer in a release.
The downturn in home-buying activity comes as no surprise after TRREB disclosed in late April that sales had plunged 69 per cent in the first half of the month.
Home Sales, Prices to Suffer Short Term Pain
Canadian real estate is currently in a “deep freeze,” with both buyers and sellers having moved to the sidelines to wait out the uncertainty of the ongoing pandemic, according to TD Economics.
“In light of the pandemic, we envision Canadian home sales remaining below their pre-virus level for the remainder of the year. Sales are poised to plunge at a historic pace in April, while gradually recovering their lost steps in subsequent months as buyers remain cautious,” notes economist Rishi Sondhi, adding that this forecast assumes a gradual re-opening of economies throughout the month of May.
“Under these assumptions, Canadian home prices suffer an outsized decline in the second quarter. After which, national average home price growth should proceed at a positive, but subdued pace for the remainder of the year.”
This forecast is similar to others in which we anticipate modest price declines in the short term before returning once again to positive growth.
Capital Economics economist Stephen Brown forecasts a 5% decline in prices in the coming months, while RBC Economics’ Robert Hogue expects Canada’s composite benchmark prices to fall briefly over the second half of 2020 by an average of 2.9% year-over-year.
Moody’s, on the other hand, is forecasting a 10% decline in home prices from their peak.
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