by Paul Ambler
on Friday, May 8th, 2020 at 8:05pm.
Welcome to week 9 of the stay at home, work from home, physical distancing marathon! I hope everyone has had some time to take a deep breath, adjust to the new routine and enjoy some time with your loved ones, a good book or perhaps some Netflix binging.
In less than two months, the real estate market in the GTA has gone from 100kph to about 25kph. Although there has been some recovery from the initial shock of the stay at home recommendations by the government, we have now had some time to look at some of the emerging trends in the marketplace. One thing is for sure, not even Canada's strongest real estate market (Toronto) is immune to the imapct of the Covid-19 pandemic. Sales are down nearly 63% and the average price dropped roughly 8% to $821,000. The numbers from March to April look like two very different worlds. However, what is worth noting, when you look at the year over year numbers, April 2020 prices are actually still higher by 0.2% from 2019.
Prices of detached homes and condo apartments took a much harder hit in the 416 than in the 905 with price reductions on detached homes in some areas in the 416 at 7.8% vs. 0.8% in the 905. The same was true for condos as prices were lower in the 416 by about 4% vs the 905 which saw about 1.7% reduction in prices. The lack of listings and sales by over 60% were contributing factors.
With some of these changes have come new behaviours, opportunities and trends in the real estate market. Buyers who have tech savy Realtors have been able to continue to search, see and make offers on properties with much less competition than in February or before. There has been much less pressure in the buying process which for many who have spent months making offers on properties only to loose out to competition was welcome news in April. One opportunity that is also emerging is for first time buyers in the condo market between 400k-650k as prices have pulled back to some degree with less competition. With lower than low interest rates this might be the best time first time buyers have had in a while to enter the condo market. We have seen a large pullback in listings above $1.8+Million as many sellers who do not have to sell at the moment have decided to wait out the short term effects of the Covid pandemic until a later time.
The leasing market hasn't been reported for the month and we had been seeing consistent gains in availability and price since the the start of Q1 2020. The success of the rental market will largely become visible in the coming months as we see how deep the unemployment rate goes. This will in turn have one of the biggest impacts on the rental market. We have noticed much longer days on market for lease listing through the month of April and suspect this has much to do with the stay at home measures in place as people are much less likely to go out in search of a lease vs a purchase.
Q1 Rental Market Stats
So how is the market? In short, its still going. Its not going with the robust vigour and energy it had leading up to March 2020, but there are sellers selling their homes and buyers buying. If you own a home in in one of the GTA's "hot pockets" or in the cities core, the chances are your home is likely very similar in price as it was pre-covid. If you are in a condo in the 416 and you had to put it on market today, you might be seeing a slight dip in the price but we expect this to be temporary.
Technology and safety are top priorities and there is no doubt the pent up demand in the real estate market will remain ready to rebound whenever things begin to open up. We expect to see more listings to come to market as we head into June as the news becomes increasingly positive and the distancing restrictions are relaxed. The buyers are still looking (albeit from their desk or phone) but the serious ones are still booking virtual showings and scheduling viewings in person donning gloves and masks. Will we get back to January or February activity right away? Likely not that quickly and it will be largely dependant on how long the stay at home measures are in place and how much the unemployment rate increases but there is no doubt that the strong real estate market in Toronto will be back.
For more information on your local neighbourhood statistics, to book a virtual listing presentation or market evaluation, or to see some of the tech tools we are using to sells homes during covid, reach out anytime to firstname.lastname@example.org or 416.884.8027