Coronavirus Update: March 2020 Toronto Real Estate Market Update 🏡😷 | Has covid-19 caused housing prices to drop?
Sunday Apr 05th, 2020Share
The latest housing stats were just released by the Toronto Real Estate Board for the month of March.
To keep it short, Covid-19 did not slow down housing prices.
The average property in the GTA went up by +14.5% (!) between March 2019 and March 2020.
Hey, if housing prices are still going up in the double digits, did Covid-19 have any negative impact?
It depends how you look at it.
About halfway through March, the virus along with government regulations, slowed down:
*the volume of buyer showings
*the number of new listings
*and hence, it slowed down the total volume of sales
Some buyers and sellers who are actively still on the market now, might not see this as a negative impact; they may see it as a positive impact since there is less competition for them (fewer buyers to compete in multiple offers & fewer properties for sale to compete with).
Hey, it's Karen from Toronto.
And I'm here with your monthly real estate update.
Now, some of you might be wondering how the real estate market is doing especially with the impacts of covid-19.
Make sure to listen to the end of the video where we share the latest March statistics as well as the impacts of the virus.
And if you're new to the channel hit that "like" and "subscribe" button now so you don't miss out on any future updates.
So let's take a look at the recent numbers for March.
Well housing prices certainly have not dropped. Not at all.
In fact housing prices continue to increase significantly. The average price for a home has gone up +14.5 % over the past year between March 2019 and March 2020.
For the month of March all four housing types saw double-digit increases in their home values.
So overall the GTA is still seeing very strong housing price increases in the double digits.
I know there are a lot of buyers wondering if they'll get a break on real estate prices, but based on these MLS statistics covid-19 has not slowed down the increases in housing prices at all.
I know you might be thinking, if housing prices are still seeing double-digit increases, did covid-19 have any negative impact on our real estate market?
Well the virus certainly slowed down the volume of sales. We did see a significant decrease in the number of buyer showings as well as the number of new properties being listed. Let's take a look at the impacts of covid-19 on buyer showings and new listings.
Covid-19 impacted the real estate market essentially overnight starting about midway through March.
If we take a look at the chart here, the purple coloured line indicates the number of buyers showings.
You'll see a drop in activity about halfway through March, but the real dramatic shift happened on March 22nd onwards. And March 22nd was when our government announced the closing of all non-essential businesses. So our government announcement significantly decreased the number of buyers showings dramatically, and we also saw much fewer new properties being listed for sale as well.
So when there's fewer buyers showings and fewer new properties being listed for sale, it makes sense to say that the number of properties being sold will decrease significantly as well.
Let's take a look at the number of properties that sold in the month of March. For the first half of the month, the Toronto Real Estate Board reported a +49% increase in the number of properties sold compared to the same time last year in March 2019.
So basically the first half of March was still a very hot seller's market.
If we take a look at the chart again we'll notice that the number of buyer showings started to decrease around the middle of March, with a significant decrease in the number of showings beginning March 22nd onwards.
And it makes sense to say that if there are fewer buyers who are out shopping for a home that there would be fewer homes being sold.
And this is true.
Although the first half of March saw a +49% increase in the number of properties that were sold, during the last half of March there were -15.9% fewer properties sold if we compare it to the same time last year in March 2019.
So even though covid-19 did not have an impact on lowering housing prices it certainly slowed down the volume of activity about halfway through March onwards. And of course, all of these numbers make complete sense because owner-occupied properties would prefer not to conduct buyer showings during this time. The virus is contagious and it's been proven to linger on certain surfaces. During showings, buyers of course touch parts of the home. For instance, they will open and close door handles or they'll have their hands along the railing of staircases, for example. It would be a tremendous amount of work to fully disinfect a home after a day's worth of showings.
So essentially the only properties that were up for sale halfway through March onwards, were properties that were vacant.
And likewise, there were fewer buyer showings from the middle of March onwards. Individuals with compromised immune systems or anyone who was simply uncomfortable viewing properties during this time have understandably postponed their plans to purchase.
And this explains why there was a -31.5% drop in the number of new properties listed for sale for the month of March.
And this directly impacts the number of properties that were sold.
Now there have been a couple of other impacts of covid-19 on our real estate market and I'm specifically referring to our regulatory board changes.
Although there are new properties being listed every day and buyer showings are continuing as well, our regulatory board immediately put a stop to all open houses as of Saturday, March 21st. Instead of traditional open houses the Toronto Real Estate Board just announced a brand new feature that is being launched on Monday April 6th, and we'll be able to do live streaming of open houses.
With this live stream open house feature the listing agent will walk through the property, present the features of the home and the client can join in online in real-time to watch the open house tour from the comfort of their home. Plus there will be an interactive feature where the listing agent can answer any questions that clients have during the open house tour. Now it's not clear yet if the tour will be saved automatically as a video for future clients to reference to. It certainly would be helpful to incorporate that idea.
Now another impact of covid-19 on the Toronto real estate market resulted in a second regulatory change more recently on March 31st, and this was in regards to tenant occupied rental properties.
The Ontario Real Estate Association called for an immediate stop on all showings for tenant occupied rental properties. So the only rental properties that are being shown right now to prospective tenants are vacant rental properties.
Also because there have been a number of job losses as a result of covid-19, the topic of rent not being paid on time has been addressed as well as the topic of differing mortgage payments.
The Ontario Real Estate Association has called for no evictions during this time and they've encouraged tenants and landlords to work together on a solution.
In terms of mortgage payments being deferred, lenders have been granting that concession to individuals who qualify under their guidelines. Please note that there are still penalties for deferring your mortgage even during this time. The only concession that lenders are granting right now, is that a deferred mortgage payment would not affect your credit.
Asides from that any differed mortgage payment comes with a penalty of having interest charged. My advice is for you to speak to your lender on payment solutions, if you need to defer a mortgage payment due to a job loss.
Now I'd love the opportunity to speak to you about real estate. If you have any questions at all that we can help you with about the real estate market, please give me a call.
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