TREB’s March GTA Data.
Toronto, April 4, 2020
By Ivan Kalinin
The big picture for home sales activity through the Toronto Regional Real Estate Board (TRREB) in March depicts a strong year-over-year (y-o-y) rise in sales of 12.3% with 8,012 homes changing hands compared to 7,132 sales the year before. ⠀
However, despite an overall increase in sales across the region, March was characterized by two different periods – the one before and the one after all three levels of government introduced emergency health and economic measures to contain COVID-19.
So, even though the numbers show an upward movement on the graph, the reality is that the second half of March had seen a significant decline in transactions.
This is a strong indicator that it would have been a very busy spring in real estate – the first two weeks were able to compensate so much for the last two. But I’m afraid we will have to wait until April’s numbers next month to assess the true impact of the pandemic.
So what’s next for the Toronto Real Estate Market?
This largely depends on how long we will be cooped up in our homes. But, what I have started seeing is that the bidding wars are almost gone, the sellers are willing to negotiate with buyers and the low(!) interest rates are a fantastic indicator that the market is shifting from a seller’s market to a buyers market, for now.
The buyers market happens when the Sales-To-New-Listings ratio drops below 40%. Many of my clients who were trying to purchase a home or investment this year and were either outbid or the property sold in one day after hitting the market are now gearing up to make their purchase. In relative peace.
But since we were hit by the coronavirus so quickly, the market is still in the transition mode and many people are wondering how the national and global economies will fair out. No one has the answer to this, but it is not unwise to expect a slow-down even with all the demand for housing that is still present in Toronto.
Personally, I am seeing clients still in the market for properties. They are taking advantage of the buyers market that is so rare in the city. Now the buyers can take their time choosing between properties without the fear that they will be sold in a day or that they would be overpaying for them in a bidding war.
The real estate market in Toronto is a dynamic and robust and has already started to adapt to the uncomfortable situation that we currently find ourselves in. The use of virtual tours is record high, and I gladly forward them to my buyer clients who can get a pretty strong sense on the layout of the home. I got them done for my listings recently myself and got some interest when I sent it off to my database.
The sellers on the other hand are much more reluctant putting their properties up for sale, especially those that are tenanted and those that are occupied by the owners themselves. So that leaves us with mostly vacant properties and there are a lot less of them, which creates a shortage of listings.
We may end up with a shortage of listings and high number of buyers who are out looking for properties willing to take advantage of the low interest rates. This higher demand and low supply sound a lot like the sellers’ market we had all along. Will that actually happen? Only time will tell.
If you are looking to purchase a home or sell your property, in the following 2-3 months it may be a challenging time to predict the outcome of your transaction. The good thing is that I remain quite active in this market and would love to share first-hand experience with you on what to expect from your real estate journey. Contact me and let’s book a video call to chat about your goals and how I help you with them.
If you like talking real estate half as much as I do and are going to participate in the market in 2020, come chat and have a coffee. And if you are looking for a property as an investment, remember our super-popular private investment tours now booking in early 2020. Click here to book.
Ivan Kalinin is a sales agent at Key Toronto Real Estate Group. Zoocasa Realty Inc. – Brokerage independently owned and operated, He can be reached at 416 858 8085. Not intended to solicit clients already under contract.