2020 has been no ordinary year. The coronavirus pandemic has been a financial wrecking ball for millions of Canadians and it has impacted nearly every aspect of life, including the housing market. But what toll has it taken on the Greater Toronto Area’s (GTA) real estate?
A look at the numbers suggests it’s already recovering well from the virus. Here’s a comparison of Q2 2020 with April, May and June 2019. (I’ll explain at the end what this all means for the coming months.)
Q1 2020 outperformed 2019 by 22.4%, setting the GTA’s hot housing industry up for a banner year. Then COVID-19 hit and 2020 Q2 sales plummeted by 41.6% year-over-year as homebuyers decided to sit on the sidelines.
New listings in the GTA slumped by almost as much as sales in Q2 2020, falling 40% year-over-year, as many sellers opted not to put their homes up for sale due to too much economic uncertainty.
Active listings on the Toronto Regional Real Estate Board’s MLS system were down by 36.6% in the GTA, compared to Q2 2019. Low inventory has helped home prices remain resilient.
The average selling price for all home types combined in the GTA was up 5% year-over-year despite the pandemic.
The average selling price for a detached home in Toronto rose 3%.
In Toronto, the strongest average annual rate of price growth was experienced in the semi-detached market at 11.7%.
The average selling price for a townhouse in the GTA increased 3%.
While the Toronto condo sector experienced the least amount of growth at 2.2%, the average price still rose.
Average property days on market (PDOM) remained relatively constant from Q2 2019 to Q2 2020, declining by just 1 day or 3.6% in the GTA.
Significantly fewer properties traded hands in Q2 2020 than Q2 2019 because of a decline in buyer demand and home offerings. At the same time, prices remained stable due to the continued (and persistent) lack of listing inventory.
As pandemic lockdown restrictions lifted in June, Toronto’s real estate market began to rebound after the brief yet steep drop of April and May — sales jumped 89% from the previous month’s figures. Prices also rose by nearly 8% on a month-over-month basis.
This points to a busy July and August; the market is expected to look more like the spring selling season. But while more homes will be listed for sale than in the previous three months, supply shortages will prevail. (Months of inventory at the end of June was 1.6.) This, combined with pent-up buyer demand after being cooped up for months, could result in many bidding wars and price spikes.
For those considering selling, including your property in this summer’s low inventory mix may be your best opportunity to sell your home quickly and for top dollar since more homes are expected to come on market in fall.
Buyers considering holding off until the weather cools or even next year should not discount the summer selling season. Prices are likely going to substantially increase over the next 2 to 3 months, setting a new standard. Although the Toronto housing market could slowdown or stall as a result of a second wave of COVID-19, high unemployment, fallout from mortgage deferrals or other factors, it’s unlikely to drastically turn (or burst). Even during the housing market crash in 2007-2008, core prices didn’t really drop, so those waiting for them to do so could be faced with greater Toronto homeownership challenges down the road.