May 6, 2020 | Buying
As COVID-19 continues its effect on our everyday lives- health, employment, safety and lack of social interaction etc. COVID-19 has also proven to have an effect on the Toronto Real Estate Market as well.
Once again, we would like to extend our sincerest thanks and our tremendous gratitude to all of our first responders and front-line workers who are keeping us all safe during this time.
As March was the turning point of it all, we saw different numbers throughout the end of the month versus the beginning of the month. These March numbers didn’t quite give us a true depiction of how COVID-19 was going to potentially shake the market. Well, now April’s numbers have been reported and, yes, the market has been shaken, but not perhaps in the way you might think.
The Toronto Real Estate Board reported 2,975 residential transactions in April which displayed a result that was down by a dramatic 67 per cent compared to April 2019. Now, 67 per cent sounds like a very severe drop, which it is, however, what’s important to remember is that the drop of 67 per cent was in the number of real estate transactions for the month of April 2020. As mentioned in last month’s blog, we knew to transact was going to prove to be difficult during this time. As open houses have been banned, condo management companies are banning showings in some buildings, as well as our government enforcing social distancing rules to protect our safety and the safety of those around us. This is not the ideal recipe for transacting in real estate, thus, the number of transactions has dropped.
The average selling price for April 2020 transactions was $821,392 which was actually up by 0.1 per cent compared to the average selling price of $820,373 reported last year. So, what do these numbers tell us? Transactions occurred less due to the difficulty behind transacting during the COVID-19 pandemic and the people of Toronto deciding to ‘sit tight’, largely due to the overall safety concerns that come along with the virus. Nevertheless, home prices have increased which means the Toronto market is still showing its strength at this point in time.
The semi-detached and townhouse market segments were the ones experiencing the annual average price growth above the rate of inflation, while condominium apartments and detached home segments experienced a year-over-year price decline on average. The trend for the MLS Home Price Index Composite Benchmark, which had been on an ascending trajectory since the beginning of 2019, flattened this April. Although, on a year-over-year basis, the Benchmark was up by 10 per cent. The MLS Home Price Index (HPI) indices represent prices for typical homes with reliable attributes from one period to the next. The statement of the MLS HPI being up year-over-year by a greater rate than the average selling price implies that the share of higher-end deals completed in April 2020 versus April 2019 had declined.
There is no doubt that transacting in Real Estate at this time has proven to be more difficult, however, not nearly impossible. We have had the pleasure of servicing a number of our clients during this pandemic resulting in successful and most of all SAFE transactions throughout the pandemic. Very serious precautions are in place and while we keep those in the forefront, we are still here to offer our guidance and expertise to help you make the next real estate move that is right for you and find ways to take advantage within the current Toronto Real Estate Market. Contact us today for a no-obligation discussion on how we can help you throughout your real estate journey.