Home sales in Vancouver, Calgary and Toronto plunged in April, according to local real estate boards, as the COVID-19 pandemic closed businesses and led to mass layoffs across the country.
In the Vancouver region, 1,109 homes sold last month, a 40-per-cent drop over last year and a near four-decade low.
In Calgary, where the housing market had started to rebound from the 2015 oil crash and recession, sales fell 63 per cent to 573 properties.
And in the Toronto area, the largest residential market in the country, 2,975 homes sold, down 67 per cent compared with the previous year, with condo sales recording the steepest drop, at 72 per cent.
Although real estate work is deemed essential in British Columbia, Alberta and Ontario, physical-distancing requirements and fear of contracting the virus that causes COVID-19 kept home buyers from viewing and purchasing property.
“Home buyers were taking a pause, saying, ‘Whoa, what’s going on. Let’s see where this will go,’ ” said Elton Ash, Re/Max’s regional director for Western Canada.
Sales started falling off a cliff mid-March when the provinces restricted activity and implored residents to stay at home. As well, regional real estate boards warned realtors against holding open houses, and banks started tightening their underwriting standards for borrowers.
Despite the steep drop in activity, home prices rose in the Vancouver region in April. The composite benchmark price, an industry metric, for all types of residential properties in the Vancouver area was $1,036,000 last month. That was 2.5 per cent higher than April of last year and the third straight month of year-over-year increases.
The prices continued to rise as the number of new listings continued to fall, decreasing 60 per cent in April compared with last year.
“Home sellers became very uncomfortable with having people come into their homes,” Mr. Ash said.
In Calgary, the number of new listings fell by 50 per cent. But the inventory of homes for sale remained elevated, contributing to an 8-per-cent drop in the average selling price across all types of homes to $422,655, according to the Calgary Real Estate Board. With the rout in oil prices crippling the province’s economy, the board said it expected challenges in the housing market to “persist throughout this year.”
In the Toronto region, new listings sank 64 per cent. Price increases in attached houses and townhouses offset decreases in condos and detached houses. The average selling price for an attached house rose 7 per cent compared with last year, while condos fell 1.7 per cent and detached houses slumped by 3.5 per cent, according to the Toronto Regional Real Estate Board.
Over all, the average selling price across all types of residential real estate rose 0.1 per cent to $821,392.
"There has continued to be enough active buyers relative to available listings to keep prices in line with last year’s levels,” said the board’s chief market analyst Jason Mercer in a statement accompanying the results.
Since last year, the Toronto and Vancouver housing markets have been recovering from the slowdown from the stricter mortgage rules and taxes on foreign buyers. Until mid-March, those markets were starting to overheat with properties receiving multiple offers over the asking price. Today, there is less competition among buyers, but also fewer properties for sale.
The number of people who entered into new agreements to rent one-bedroom and two-bedroom condos fell more than 50 per cent last month, while the average rent for a one bedroom was down nearly 3 per cent to $2,107, according to the Toronto Real Estate Board.
Residential sales are expected to fall in May even though the real estate industry has been forced to embrace technology that allows homeowners to show their homes virtually and the popular five-year fixed mortgage is slightly lower than it was at the end of March.
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