Home sales in the Greater Toronto Area plunged 67% in April as unprecedented Covid-19 social distancing measures and economic uncertainty affected sales and new listings, the Toronto Regional Real Estate Board reported Tuesday.
In Vancouver, home sales hit their lowest levels in nearly 40 years in April, and experts say buyers can expect price declines to eventually follow.
“Past recessions and recoveries do not necessarily provide the best guide as to how the housing market will recover from the impact of the Covid-19 pandemic,” TRREB chief executive John DiMichele said in a statement.
Provincial, local and federal officials say they’re making cautious plans to relax or remove restrictions that were put in place in mid-March to slow the spread of the novel coronavirus, which has been blamed for more than 1,300 deaths in Ontario.
In the meantime, Ontario continues to restrict non-essential business activities to reduce the chances of spreading the virus from person to person.
“The necessary social distancing and economic impacts associated with Covid-19 clearly impacted home sales and listings throughout April 2020,” added TRREB president Michael Collins.
He said TRREB members have used live video streaming to replace in-person open houses “and I would expect the use of these innovative techniques to increase as some level of social distancing remains in place for the foreseeable future.”
TRREB said there were 2,975 residential transactions in the GTA in April, compared with 9,005 transactions in April 2019. New listings fell to 6,174 from 17,212 in April 2019, a decline of 64%.
On a seasonally adjusted basis, TRREB said April home prices in the GTA fell 11.8% from March.
Prices for renters were also down for the month, with the average one-bedroom rent falling 2.7% to $2,107, and the average two-bedroom rent falling 4.1% to $2,705.
April’s sales in the City of Toronto fell nearly 68% year over year, while the average price fell 2.5%, to $881,424 in April 2020 from $904,199 a year earlier.
Condo rentals were down on a year-over-year basis in April, falling 57.9% for one-bedroom units and 54.4% for two-bedroom units.
In Vancouver, the sales total of 1,109 homes was 62.7% below the 10-year average for April and the lowest total for the month since 1982 after a full month of Covid-19 restrictions.
New home listings also fell, down by 59.7% to 2,313 in April compared with a year earlier, while the total number of active listings was down 34.6% compared with April 2019.
The Real Estate Board of Greater Vancouver says the sales-to-active listings ratio was 11.8% for the month, just nudging into the level analysts consider as signalling potential for downward pressure on prices.
For April, prices held with the composite benchmark index price up 2.5% from a year earlier, and up 0.2% from March, at $1.04 million.
It could take months, however, for changes in the economy and housing market to start to reflect in home prices, said Steve Saretsky, a realtor at Oakwyn realty.
“Real estate’s really slow moving, it’s sticky. It’s especially hard to judge prices when you have volumes that are the lowest they’ve been in 35, 40 years.”
He said so far he’s only seen some marginal price discounting, but does expect pressure on prices as the confluence of higher unemployment, economic uncertainty, lower immigration and other consequences of the pandemic play out.
Supply could also eventually be affected as builders hold back, but the current level of record housing construction in the area will still have to be completed, said Saretsky.
“That supply’s coming online regardless of whether the demand’s there to meet it.”
Foreclosures could also add to supplies, said CIBC economists Benjamin Tal and Katherine Judge in a note Friday.
“Forced sales will add to supply, and probably outweigh the offsetting impact of reduced supply of new units.”
They predict large swings in both supply and demand in the coming quarters, and expect to see average prices down five to 10% relative to 2019 levels when the market stabilizes.
“By 2021, as the economics of housing returns to fundamentals, we expect an array of factors to result in a weaker market with some downward pressure on prices.”