The World Is Still Turning
Part of Toronto’s greatness is our overall respect for each other, our compassion, and our embrace of ‘world information’. We pull together as a city, a province, and a country because we care about each other. On the flip side, people want to resume their lives and we’re watching protests south of the border. There are scary things happening, and everyone is wondering what our world will look like when the dust settles.
We can’t tell you what the specifics will be, but we do know that there is no place on earth that we would rather be in these scary times than in Toronto. Right here with you – with the people that make up the greatest city on earth to live in. Our economic indicators are some of the best in the world, we have world-leading medical centres and research, our educational system is world-class, and we have sane leadership. Who wouldn’t want to live here? We believe that simple question will answer Toronto’s real estate future.
Real Estate sales in Toronto (and most of North America) started strong in early 2020, with sales volume up over 50% year over year. As COVID-19 changed our reality, the market slowed dramatically. Listings and showings dried up, because we listened to the health professionals and protected each other. Prices have remained (relatively) stable, as demand and supply shrank in unison.
Market statistics, largely provided by TREB:
- Sales volume declined 69% (April 1 – 17, 2019 vs 2020)
- New Listings declined 63.7%
- Lower price points (under $1m) are still selling relatively quickly, while more expensive housing units are starting to take longer to sell.
- Prices are trending down slightly (-1.5%); aside form the increased percentage of lower price point sales, we believe that households that purchased in Feb / March are taking slightly lower prices to guarantee a sale.
- Inventory is currently around 2 months (it would take 2 months for all the homes listed to sell), which is up from 1.5 months at the end of March. This still indicates a fairly ‘tight’ seller’s market.
- Supply and demand are reasonably balanced so far, as both sellers and buyers pause market activities in unison.
We anticipate that prices will continue dropping slowly in the coming months, as leases are broken and sellers require capital. However, access to capital, very low interest rates, and pent up demand will keep Toronto’s real estate market relatively healthy. Some recent price gains may be erased, but a resilient economy and pent-up demand will keep supply and demand more closely coupled than south of the border.