toronto home sales

Toronto home sales are plummeting on account of COVID-19

It's been about nine months since Toronto home sales started rising again after nearly two years of steadily sinking thanks to government cooling measures.

Now, just when the city's real estate market was heating back up to levels not seen since the record-breaking boom times of 2015 and 2016, sales are dropping — and sharply — on account of the COVID-19 pandemic.

Realtor and data analyst John Pasalis has started keeping weekly tabs on home sales and prices in the GTA as the market grows increasingly volatile in these unprecedented times.

His latest piece, published Tuesday, suggests that Toronto's real estate market "hit the brakes" in the last week of March 2020, even after posting significant year-over-year gains during the first three weeks of this month.

"When looking at how sales have changed this year compared to last year, we see that they have been up pretty much the entire year," writes Pasalis.

"They were up by roughly 50% during the first two weeks of March, during the third week sales were up 18% and last week sales finally hit the brakes and fell 37% over the previous year."

Pasalis notes that, when released, stats for March 2020 will still show an average sales increase of about 15 per cent, "suggesting the market is still booming."

"But that monthly figure masks the fact that sales during the past couple of weeks have been slowing down dramatically," he writes.

Prices, on the other hand, have remained relatively stable so far thanks to low inventory: New listings fell by 33 per cent in the GTA last week alone and the number of homeowners taking their properties off the market is up some 27 per cent over the same time last year.

Buyers simply aren't willing and sellers aren't able to participate in open houses every weekend, as they normally would, now that Ontario is in a state of emergency and gatherings of more than five people are prohibited.

"Both sellers and buyers (and their agents) are hitting pause on their real estate transactions, as we have been directed to by the Province of Ontario, the Ontario Real Estate Association and other authorities as part of our overall efforts to reduce the spread of COVID-19," writes Pasalis.

And Toronto isn't alone; COVID-19 is expected to impact real estate markets across the country until the pandemic comes under control and authorities lift gathering restrictions.

"Canada's housing market will slow to a crawl this spring as Canadians follow social distancing orders in order to combat the spread of COVID-19," reads a report on the subject from RBC Economics published on Monday.

"We expect realtors to suspend open houses and cut any private showings to a bare minimum. Signs were starting to point toward a significant pullback even before governments stepped up restrictions on social gatherings and despite the adrenaline shot from the Bank of Canada's back-to-back interest rate cuts this month."

"Mounting job losses, reduced work hours, the shutdown of Canada's borders (stemming the flow of in-migrants) will hammer confidence and cool demand," reads the RBC report.

"There will be plenty of reasons for sellers to wait and see as well. A shock like this one is an inauspicious time to get full value for a property."

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