Home sales in Toronto and Vancouver soared in the first half of March and then plummeted in the second as the spread of COVID-19 prompted provincial governments to shut down activity, according to the local real estate boards.
“There was a clear break in market activity," said the Toronto Regional Real Estate Board.
In the first half of March, 4,643 homes sold in the Toronto region, a 49-per-cent increase over the same period last year. In the second half of the month, 3,369 homes sold, a 16-per-cent decline over the same two weeks last year.
Similarly in Vancouver, there were an average of 138 daily residential sales in the Vancouver region in the earlier half of the month. In the latter half, the daily average fell to 93 sales, the Real Estate Board of Greater Vancouver said.
“The first two weeks of the month were the busiest days of the year for our region, with heightened demand and multiple offers becoming more common,” Ashley Smith, the board’s president, said in a statement accompanying the results. “This changed as concerns over the COVID-19 situation in our province grew.”
Over all, 2,525 homes sold in the Vancouver region in March – a 46-per-cent increase over last year, when buyers were still coming to terms with tougher mortgage rules. That’s the ninth consecutive month of double-digit year-over-year increases.
But Ms. Smith said many of the sales were in process before the provincial government declared a state of emergency and curtailed non-essential activity.
In the Toronto region, 8,012 homes were sold last month, an increase of 12 per cent over March, 2019. Although the majority of sales occurred before the province started shutting down non-essential services and Canadians were told to stay at home, there were still reports of properties receiving multiple offers in the last few days of the month.
The average selling price for a home was $902,680 in March, 15 per cent higher than last year. But the average selling price in the second half of the month was lower than the first half.
Since last year, the Toronto and Vancouver housing markets have been rebounding from the slowdown brought on by a tax on foreign buyers and stringent loan-qualification rules. By January, February and early March, the market had become highly competitive owing to the shortage of homes for sale. That competition was starting to push home prices higher.
In the Vancouver region, the benchmark price or the industry calculation for all types of homes was $1,033,700 last month. That is a 2-per-cent increase over March, 2019. Whistler and Squamish recorded the steepest increases, with both areas up a minimum of 4 per cent year over year.
With fewer sales and warnings against holding open houses, realtors predicted that home prices would remain flat.
“I don’t see how we can see an increase in prices with the decline in number of sales happening,” said Richard Laurendeau, manager of Re/Max Westcoast.
Although the Bank of Canada cut interest rates three times in March – they’re now at 0.25 per cent – the mortgage rates on new loans aren’t that much lower than they were earlier this year. Government shutdowns have closed most industries and led to scores of job losses.
Realtors have been deemed an essential service in British Columbia and Ontario, but many buyers and sellers have put their plans on hold. "We’ll need more time to pass to fully understand the impact the pandemic is having on the housing market,” Ms. Smith said.
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