Sales slowed in the second half of March, but just how bad can things really get in the GTA post-COVID-19?
There were few surprises in the Toronto Real Estate Board’s most recent statistical report, released April 3. Similar to what was seen in January and February, sales in the pre-COVID-19 portion of the month, roughly the first two weeks, were very strong, topping the previous year’s totals by 49 percent.
Once social distancing measures went into place, however, activity plummeted. Sales over the last two weeks of March were 15.9 percent lower compared to the same period in 2019.
The question when looking at figures that lay out such diverging narratives is which one tells more of the full story. According to John Lusink, president of Right At Home Realty, it may be the one told during the first two weeks of the month, which speak to the GTA market’s unchanged fundamentals.
“Last year we really had a slow spring market. This year, we were well on pace to see some record-breaking numbers putting us back into multiple offer situations and continued increase in price appreciation,” he says. “Compared to last March, we were far and away moving well ahead of those numbers.”
Right At Home’s own data, which it collects every Monday from over 5,000 realtors, showed a 54% decline in incoming transactions on April 6.
“Similar to TREB, what that’s telling us is the impact of no open houses or showings and, of course, most realtors taking a proactive approach of telling clients, ‘Look, unless you have to list, don’t list,’” Lusink says.
But nothing contained in either TREB or Right At Home’s data was strong enough to shake Lusink’s faith in the GTA market. Right At Home’s average list-to-sale price ratio was around 108 percent at the beginning of April, a sign of intense buyer interest and price stability.
“I don’t see prices really suffering, not in the Toronto area,” he says, adding that he expects to see a very active market come fall. “It’s just that the brakes will have to be on for a while.”
Lusink’s worst-case scenario for the GTA involves another flare-up of the coronavirus, which some medical experts expect in the fall. The fallout, then as now, won’t be a full-blown housing crash, just a sequel to the pause being experienced now. If it comes to pass, it will be more of a challenge for real estate professionals than most other Canadians.
“If we’re hit with another round of this and we’re on another two- or three-month lockdown, that kind of wipes out the whole year,” he says.
But Lusink is confident that real estate professionals who have used the past few weeks to reorganize and improve their businesses will be back up and running as soon as they’re allowed. The GTA, if fundamentals trump crises in terms of long-term market impact, should be there to meet them.
