Home sales take a big tumble in cities across Canada
With all of the economic disruption that the pandemic has caused so far in 2020, there have been conflicting forecasts about how the infamously hot housing markets of some Canadian cities will be impacted.
Real Estate boards in places such as Toronto, Vancouver and Calgary have all reported serious dips in both the number of listings and real estate transactions, leaving many wondering how long the stagnancy will last and if it will affect home prices.
Toronto's market saw a record low number of sales last month, at 2,975, which is 67 per cent fewer than the same time last year and just over half of the lowest sales volume on record for an April, which was 5,386 in 1996.
But, aside from condos, home prices are generally holding steady in the city — as many experts thought they might — with the Toronto Regional Real Estate Board (TRREB) citing an average selling price of $821,392 in its monthly market report, up one per cent from last April.
With provincial and public health safety measures in full effect, COVID-19 expectedly slowed down housing market activity across the Toronto Region this April. Our commentary based on the latest from @TheReal_TRREB, available here: https://t.co/dCpKSYniip pic.twitter.com/BdzpbwlkwF— Zoocasa (@zoocasa) May 5, 2020
Vancouver, another notoriously vicious market, is likewise reporting falling listings and sales, with 56.1 per cent fewer sales in April 2020 than March 2020, and a whopping 62.7 per cent fewer than the 10-year April sales average.
This is according to the Real Estate Board of Greater Vancouver (REBGV), which attributes the change in part to current rules around physical distancing and isolation, which have meant that things like open houses are now off the table.
Though homebuying transactions in Vancouver were scarcer than they've been in the month of April since 1982, REBGV remains hopeful, saying that realtors have adapted, moving much of their work online.
Prices, too, have been relatively unaffected, up 2.5 per cent from April 2019 and 0.2 per cent from March 2020.
Vancouver home sales dropped 39% y/y in April. Officially the slowest April on record. pic.twitter.com/QmlOiEvXuD— Steve Saretsky (@SteveSaretsky) May 4, 2020
Calgary is another provincial capital that has reported a dramatically low April sales volume of only 573, a 63 per cent decline year-over-year.
And, the Calgary Real Estate Board (CREB) is saying that these figures are actually starting to lower prices in the area, as "demand is falling faster than supply," which is "keeping the market in buyers’ territory" for the first time in a long time.
This is especially prevalent for more expensive homes above the $600,000 mark in the city, as buyers are hesitant and potentially strapped for work and cash during this unprecedented time of financial (and general) uncertainty.
CREB notes that financial incentives like low prime lending rates across Canada may encourage buyers, but that "challenges in the housing market are expected to persist throughout this year."
Calgary MLS® sales were down 63% Y/Yin April with detached home sales down over 70% vs 10 year average— Calgary Real Estate (@YYCREGuy) May 4, 2020
Listing inventory currently 8 months for detached SF and 14 months for condos#YYC #CalgaryRealEstate pic.twitter.com/1QeOITTUn3
The above mentioned factors, as well as a spike in unemployment rates across the country, certainly haven't helped. Though there will always be some residents who urgently need buy or sell a home, for most, it is something that can be put off for the time being until things are more stable.
But with provinces slowly opening up their economies in the coming weeks and people getting back to work, there is still the potential for the Canadian real estate industry will bounce back sooner rather than later.
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