COVID-19 Causes 80% Drop in Number of Condo Transactions in Toronto
The old saying, ‘what goes up must come down’ definitely rings true when it comes to Toronto’s current housing market. After months of consistent activity and increasing prices, we’re finally starting to see both prices and the number of transactions fall as a result of COVID-19’s tight grip.
The first two weeks of March saw Toronto-area home resales up 49% year-over-year before plummeting 16% for the final two weeks as the new social distancing measures came into effect. However, in the weeks to follow, overall pricing may have stayed up, but according to real estate agent Doug Vukasovic, that growth is finally starting to “soften.”
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According to Vukasovic, prices in the freehold segment have dropped -8% last week, as a result of detached homes declining -9% and rowhomes at -17%. But it’s not just prices that have been impacted, it’s also the number of transactions, too. Vukasovic says freehold sales accounted for 355 transactions on March 15, compared to just 79 on April 19. The condo segment saw a similar shift, with 444 transactions recorded on March 15 before dropping to just 70 transactions on April 19.
“The declines in the number of homes sold seem to have tapered off in the past two weeks, establishing perhaps a new baseline of around -75% for freehold and -80% for condos versus the prior year,” says Vukasovic.
Additionally, Vukasovic says in the past week, less than 30% of freehold and 19% of condo inventory were priced for multiple offers, a big shift from previous weeks in which a majority of the inventory was priced to accept multiple bids.
As physical distancing measures remain in place and home showings restricted, new listings are down by around 50% in the past three weeks compared to this time last year. According to Vukasovic, on March 15, there were 1,308 new listings in Toronto compared to just 503 on April 19.
But when looking at Toronto’s housing market as a whole over the past month, Vukasovic says detached homes have been impacted the most. He says for the first time in the past four weeks there is negative growth for detached homes. However, the overall average price of a home in Toronto is still up 5%.
Currently, the average price for detached homes in Toronto is $1.28 million; $1.13 million for semi-detached; $1.01 million for rowhomes; $657,000 for condo apartments, and $694,000 for condo townhouses, according to Vukasovic.