Since COVID-related closures and social distancing took effect in Canada, life as we know it has been put on pause within the city of Toronto. As one of the hottest real estate markets within Canada, many have speculated on the impact that the public health crisis will have upon this market. While it is impossible to make a definitive prediction of how Toronto’s real estate market will weather this storm, there exists a great deal of optimism that any COVID-19 impacts are expected to be temporary.

Below, we take a look at the pre-crisis market and current conditions within Toronto, to better understand the basis of the optimism, and why Toronto is poised to make a triumphant return as one of the country’s hottest real estate markets.

A Strong Start to the Year

In the first quarter of 2020, Toronto was gearing up for a spring market like no other. Demand heavily outweighed the supply of homes for sale within the Greater Toronto Area, and the aggregate price of homes was $866,211, a 7.5-per-cent year-over-year increase. These skyrocketing prices were most apparent within the condominium submarket, where values had shot up 8.8 per cent year-over-year.

Toronto Market Reaction to COVID-19

With social distancing measures imposed to prevent the spread of the virus, Realtors across the city, and the country, have been adjusting to a new normal for conducting real estate transactions. While the real estate industry was deemed an essential service and permitted to continue to function by the Government of Ontario, open houses came to a halt. In response, real estate agents have gotten creative, using interactive 360-degree tours, or live-video sessions to showcase homes to prospective buyers. When in-person tours must take place, agents are taking extraordinary measures to ensure the safety of their clients and themselves. It goes without saying, deals are no longer being sealed with a handshake.

The impact of COVID-19’s spread and social distancing measures upon the Toronto real estate market didn’t reveal themselves in the numbers until the second half of March. Going into March, in fact, the Toronto market was still on fire. According to Toronto Regional Real Estate Board (TRREB) statistics, sales volumes had climbed 49 per cent across the GTA compared to the same period in 2019. By the second half of March, the tables turned and home sales dropped 15.9 per cent compared to the same two weeks of 2019.

Home prices, however, remained strong by the end of the month, with the average sales price for March up to $902,680 – an impressive 14.5-per-cent spike over March 2019. RE/MAX brokers in some of Canada’s key housing markets agree that prices are expected to hold steady, at least for the next few months. Despite softening sales activity since the outbreak, those who have listed their homes on the market are well aware of the sales prices in February and early March, and thus are continuing to hold their price and wait out the current crisis, until the wave of demand returns. Panic sales – in which sellers price low to get their home off the market – has yet to be seen within Toronto.

Continue to read on: RE/MAX.ca