Want to know how the COVID-19 crisis has affected the Toronto Real Estate overall? Want to hear MY prediction for April 2020? Take a look at this video!
TRREB has separated their data into 2 sets, PRE-COVID19 and POST-COVID19
Overall in the Greater Toronto Area (that’s including Peel, York, Durham..etc), there were around 8,000 transactions in March 2020 which is up around 12% compared to 7,100 sales reported in March of last year.
So things were continuing an upward trend that we were seeing since the beginning of the year.
Now when we look at the numbers between the pre-COVID-19 and post-COVID-19 periods, we could clearly see a break.
It was obvious that the overall March sales were driven by the first 1/2 of the month. There were 4,600 sales reported in the pre-COVID-19 period, accounting for 58 per cent of total transactions and representing a 50 per cent increase compared to the first 14 days of March 2019.
In the second 1/2 during the post-COVID-period, there were just around 3,400 sales reported – down by almost 30% comparing to first 1/2.
And if we look at the number of new listings, the 1/2 half of March we saw a drop of 18 per cent as compared to the same period in 2019.
As for average home price, the average selling price for March 2020 as a whole was $902,000 – up 14.5 per cent compared to March 2019.
However, the average selling price for sales reported between March 15 and March 31, was $862,000 – down 4.5% from the first half of March 2020, but still up by 10 per cent compared to the same period last year.
What does this all mean?
I think that we have to look at the March numbers in two ways. We can probably ignore any positive gains in the first half because that’s history now and the world as we know it, has been turned upside down since the second half of the month.
When we get out of this epidemic, I believe the whole economy will be quite different and unfortunately, many companies and jobs will be lost for a long while. The length of the current shut down will have a huge impact on the real estate market.
We also need to look at the data second half of the month of March with some caution. That is because on March 22, the government of Ontario issued an initial list of essential workplaces that was still allowed to operate and real estate trade was part of it. Because most agents work outside of their physical offices, many of them were still out selling, listing homes and doing open houses as usual.
On Apr 3rd, a revised essential workplace list was announced by the government of Ontario and although real estate trading was still on the list, there were some stricter stipulations. Agents are banned from doing any sort of open houses and non-essential showings. Face to face meeting is highly discouraged and almost all of the physical offices are being asked to close.
With the new directive, the number of sales will continue to decline week to week over the next couple of months and those who really need to buy or sell, because they either bought a house in February or sold theirs, will become less and less.
In conclusion, my prediction for the month of April will be another 8-10% drop in average home prices and as much as 40-50% drop in the number of transaction between April and March!