Toronto home sales rebound in June as market shrugs off coronavirus slowdown

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Toronto home sales rebounded in June, with the average selling price up 12 per cent over the past year, as competition heated up after a brief slowdown from the coronavirus pandemic.

Once again, properties across the Toronto region are fetching multiple offers and bids well over asking prices. Ultralow mortgage rates, a shortage of properties for sale and strong demand is leading to bidding wars and higher prices.

Home buyers were forced to put their purchases on hold when the COVID-19 pandemic hit in March. Now that Ontario and Toronto are starting to allow more businesses to reopen and are easing restrictions, buyers have started to pounce.

“Before the onset of COVID-19, there was a great deal of pent-up demand in the market. This pent-up demand arguably increased further over the past three months,” Lisa Patel, president of the Toronto Regional Real Estate Board, said in a statement accompanying the results.

Toronto real estate buyers turn to the suburbs as more people work from home

Other cities that had robust sales before the pandemic also saw strong recoveries last month. Vancouver sales were higher than June of last year and prices rose by 3.5 per cent, according to its home price index, an industry calculation of a typical home price. In Ottawa, sales were essentially flat on a year-over-year basis in June, but the average selling price rose by 17 per cent for condos and 15 per cent for houses.

In the Toronto region, sales and prices have rebounded to pre-COVID-19 levels. The largest residential market in the country saw 8,701 homes sold in June, up 84 per cent on a seasonally adjusted basis from the previous month and a similar volume of sales compared with June, 2019, according to the board.

Although new listings increased 2 per cent year over year, the number of active listings was about one-third less than June of last year.

The average selling price across all types of homes in the Toronto region rose 12 per cent to $930,869, compared with the same month last year.

Toronto realtors have described a hectic market where certain properties attract about 100 private showings or sell within days of being listed. According to data on online brokerage HouseSigma.com, some semi-detached houses have fetched between $300,000 and $450,000 more than the asking price.

Steven Green, a realtor with Royal LePage, said two of his clients’ homes sold in less than a week: A condo sold in one day and a house drew multiple offers the first day it was listed.

“Almost everywhere in the greater Toronto area is more competitive for buyers,” said Mr. Green, who has worked as a realtor in the area for more than three decades.

That competition is reflected in the price inflation. In the city of Toronto, the average selling price of a detached house climbed 14 per cent to $1,523,770 in June, and a semi-detached house jumped 22 per cent to $1,287,832, according to the board. The average selling price of townhouses and condos rose about 6 per cent over June of last year.

In the surrounding suburbs and nearby cities, prices also surged, in part because of demand from Torontonians looking for more space, according to local realtors. In the parts of the Greater Toronto Area surrounding the city, the average selling price for a detached house rose 12 per cent to $1,027,634 and a semi-detached house increased by 9 per cent to $752,808.

As a result, the board said its price forecast for the year could exceed its initial estimate of an average sale price of $900,000 for the Toronto region. However, the board lowered its annual sales forecast to 80,000 homes from the previous outlook of 97,000 sales, because of the 10-week slowdown that started mid-March.

After the province stopped non-essential work mid-March, sales slowed considerably in April and prices remained flat. Before the pandemic, the average selling price across all properties in the Toronto region was increasing by double digits. In April and May, sales were considerably lower than last year, although prices held steady in the first full month of the pandemic and started rising again in May.

The rebound in June does not mean it will hold until the end of the year. The Canada Mortgage and Housing Corp. has predicted national home prices will decline and reach a low next year, after loan deferrals arranged during the pandemic are due to expire.

Banks have deferred mortgage payments for about 15 per cent of their residential loan portfolios. The deferrals last for up to six months and many mortgage holders are due to resume payments in the fall. If homeowners cannot do that, they may be forced to sell their properties, which could add more supply and depress prices.

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