Despite a lockdown due to the COVID-19 pandemic, thousands of people in Toronto still bought a home. Toronto Regional Real Estate Board (TRREB) data shows a big increase in March sales. The rise in sales was due to the first-half of the month, prior to the board’s request to stop face-to-face activity. Despite the request, thousands of people still went out and bought a house afterwards.
Greater Toronto Real Estate Prices Rise Double Digits
The benchmark, a.k.a. the weighted index price of all homes reached a new high. TRREB reported a benchmark of $865,200 in March, up 11.06% from a year before. The City of Toronto benchmark reached $955,200 in the month, up 10.59% from last year. This is astronomical price growth, implying buyers somehow saw very little COVID-19 risk.
Greater Toronto Benchmark Price
The price of a “typical” composite home across Greater Toronto.
Source: TRREB. Better Dwelling.
The price growth is some of the largest in Toronto real estate history. The 11% increase is the fastest 12-month increase since September 2017. It’s also higher than any other period prior to 2016, over the past two decades – with the exception of the recovery after the Great Recession.
Greater Toronto Benchmark Price Change
The annual percent change of TRREB’s benchmark price for all home types.
Source: TRREB. Better Dwelling.
The median sale is still significantly below the benchmark, but made a bigger rise. TRREB’s median sale price came in at $785,000 in March, up 13.77% from a year before. The City of Toronto reached $800,000, up 17.30% from last year. That means half of all homes were sold at least 9.26% and 16.24% below the benchmark.
The average sale price was somewhere between the benchmark and median sale price. The average sale price across TRREB reached $902,680 in March, up 14.5% from last year. The City of Toronto’s average sale price hit $987,787, up 19.0% from a year before. While both of these are much higher than last year, they’re also lower than February. This is an unusual dynamic for March, which normally climbs from the month before.
Greater Toronto Average Sale Price Change
The annual percent change of the average sale price of all homes.
Source: TRREB, Better Dwelling.
Toronto Real Estate Sales Rise, With Over 3k Purchases Post-Lockdown
Unbelievably, Greater Toronto real estate sales made a substantial climb in a pandemic. TRREB reported 8,012 sales in March, up 12.3% from last year. The City of Toronto represented 2,771 of those sales, up 8.88% from last year. March was the biggest since 2017, but that’s partially due to an unusually slow past two years. In the past 10 years, only 4 Marches came in lower than last month.
Greater Toronto December Home Sales
The total home sales across TREB by year, for the month of March.
Source: TRREB, Better Dwelling.
Predictably COVID-19 put a drag on sales in the second half, but a lot of people still bought. Breaking down TRREB sales, 4,643 sales occurred before March 15, a 49% increase from last year. After March 15, there were 3,369 sales in the remainder of the month, down 15% from last year. Considering TRREB recommended a stop of all face-to-face business on March 24, a surprising amount of people still bought.
Greater Toronto Inventory Falls, Because, Who Sells During A Lockdown?
The number of new listings suffered a similar impact, with a big drop in the second half. TRREB reported 14,424 new listings in March, up 3.1% from last year. The City of Toronto represented 4,900 of those listings, up 8.23% from last year. Similar to sales, after March 15, new listings declined 18.4% from the same period a year before.
Greater Toronto Sales To New Listings
The number newly listed units per month, in contrast to sales.
Source: TRREB, Better Dwelling.
The lack of listings in the second half of the month really put a drag on total inventory. TRREB had 10,676 active listings in March, down a whopping 31.45% from last year. The City of Toronto represented 3,373 of those listings, down 26.30% from last year. The suburbs are seeing a much faster drop in inventory, compared to the City. But once again, you’re less likely to list your house in a pandemic than buy one, so the skew is somewhat expected.
Greater Toronto March Active Listings
The total of active home listings across TREB by year, for the month of March.
Source: TRREB, Better Dwelling.
March was a difficult month to gain insights, since it was really split into pre and post COVID-19. What we objectively know is the lack of transaction volume in the second half makes it hard to gain any real insight into price movements. Buyers were very exuberant going into the beginning of the month. By month end, banks reported 500,000 Canadians requested deferrals from their mortgages. That works out to about 8% of mortgages across the country.
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Very much reminded of the first home I bought. April 1990.
Sold at a loss a couple years later, because the upgrade I bought was a better deal. Too bad transaction costs are so high these days, that it may not make sense to do that this time around.
Half a million mortgage deferrals, and depression numbers for employment sound like bullish indicators to me.
I have no idea why people would make such an extravagant purchase while this is going down.. I don’t believe all real estate is going to get walloped however Toronto/Vancouver/ Victoria are in my opinion going to get hammered down 30-50%, I hope that the bag holders have some money put aside for the rainy days ahead!
Does anyone actually believe the Greater Toronto Benchmark Price? Prices are not going up! Total fraud numbers. OREA, CREA, TREEB should be ashamed of themselves.
How many of those COVIDIOT’s bought RE and now want out? Lots I’m sure. RE was already going down, this will speed it up further.
Would you mind explaining why you think the numbers are fraudulent?
I don’t understand, of these 3000+ sales I assume the vast majority of them were transacted well before (even before March) and the closing dates just fel in the last week of Mar. Can you clarify what the trigger date is for a sale to be officially recorded by treb – ie accepted offer/firm deal or closing date (which is ofent 30-60 days out). I think this is important to note??
@MStar
Sales are reported on agreement, not closing. Closing takes 2-3 months. If it falls through, the month is revised.
These are people that thought, “I’m comfortable entering this agreement right now.”
I will say there’s a lot of people that have completely disregarded risk, and can only see the upside since the government has created so much moral hazard. They believe lower rates mean higher prices, and if prices fall the government will create an incentive floor so they don’t lose money.
I can tell you that houses here in KW and are bidding up by 5-10% in many cases, generally in the most desirable neighborhoods. Even the lower end areas are selling at list or slightly 1-2% higher. So while I’m an absolute real estate bear and think it’s a trash investment in comparison to investing in equities, it’s also very disingenuous to pretend that things still aren’t bidding up. People have been posting that on this site since it’s inception.
People are not going to let a global pandemic and total economic meltdown get in the way of their home buying. With mortgage relief they can stop making payments before they move in and now many economists are now are calling for a Debt Jubilee, where all debts are cancelled. Buyers could end up getting a house for the price of their downpayment with the government picking up the tab for the balance. It’s a great play for those shrewd enough to recognize the opportunity.
You don’t qualify for mortgage relief if you just bought a house.
A debt jubilee implies a default on all existing debt, which would even worse than highly indebted households – it requires currency collapse. No reasonable economist advocates for one.
What is the proof that the buyers are actually in Toronto?
Houses 50% off 😃
No job. ☹️
This is the propoganda the organized real estate machinery has been pushing an agenda to keep their commissions flowing, the banks can keep fleecing the borrowers by charging a massive spread of over 3% more for doing nothing and guranteed by CMHC Which is none other than the government (tax payers) and the ruling class remain in power by creating the house price illusion to get the votes.
My neighbours home is for sale. Shoppers are climbing ladders to look inside the windows today. I can’t believe what my eyes saw at 9am today in Newmarket.
Goin down like a lead zeppelin
This situation has two sides – although the market is offering lower prices, people still cannot buy because of job loss /salary reduction. So these prices make sense only to people who had accumulated enough money ”for individual purposes”. They will use the profitable situation,I guess