The province’s real estate market showed “encouraging signs of recovery” in May, analysts said, even as it remained down year over year.
In a Monday (June 15) release, the B.C. Real Estate Association said a total of 4,518 residential unit sales were recorded in May, up from 3,284 in April. The average residential price dipped by just under $9,000 to $728,898 from April to May, while total sales dollar volume rose from $2.4 billion to $3.3 billion.
When looking at year-to-year figures, May 2020 residential unit sales were down 45.2 per cent from the year prior, while total sales dollar volume was down 43.5 per cent. The average residential price was up 3.2 per cent from 2019 to $728,898.
“There were encouraging signs of recovery in May,” said chief economist Brendon Ogmundson. “While activity is still far below normal, both sales and listings are up significantly from April’s lows.”
The association said new listings did start to “normalize” in the first week of May, but active listings are still down nearly 24 per cent.
Year-to-date, residential unit sales were down 14.2 per cent compared to 2019, while the average price was up 9.6 per cent to $753,155.
|MLS homesales, month-over-month. (BCREA)|
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RE/MAX Canada | Why Have Toronto Real Estate Prices Not Crashed? – RE/MAX News
In only a few short months, the COVID-19 pandemic decimated the global economy and permanently altered our lives. When the world rang in a new decade, nobody could have envisioned a virus outbreak and the resulting “new normal” for consumers, businesses and governments for the years to come. Some experts forecast that it could take years before we return to any semblance of normalcy, whether in the way we interact with each other or how financial markets function.
Since the public health crisis has affected every facet of the economy worldwide, all eyes have been on the red-hot Canadian real estate market. Closer to home, buyers and owners alike are waiting to see if Toronto will finally witness a drop in condominium and house prices. While it’s difficult to project long-term trends, recent figures indicate real estate Toronto prices are far from crashing.
Did April Showers Bring May Flowers?
In April, the economic fallout of COVID-19 and the many social distancing guidelines triggered a deep freeze in the Toronto regional real estate market. A month later, there was an unexpected rebound.
According to May figures released by the Toronto Regional Real Estate Board (TRREB), home prices in Toronto and across the GTA were up 3 per cent year-over-year, to $863,599. In the 416 area, detached houses climbed 2.7 per cent and condos picked up 1.8 per cent. However, fewer transactions are taking place, with 4,606 properties changing hands in May – a 53.7-per-cent decline year-over-year but up 55.2 per cent compared to April 2020.
Overall, the real estate market has held steady throughout the financial crisis. While transactions have slumped since the coronavirus pandemic crippled the Canadian economy, average prices have remained resilient.
Why Have Toronto Real Estate Prices Not Crashed?
So, what is happening in one of the country’s hottest markets? The broader numbers show many people out of work, businesses shut down and rising household debt levels. At the same time, there has been sustained activity in the number of buyers compared to available listings. This is one of the chief factors in supporting price growth relative to last year’s pace, despite shifting market conditions.
Those who have kept their employment and refrained from dipping into their down-payment savings are in a good position to take advantage of lower borrowing costs. In March, the Bank of Canada (BoC) imposed a 50-basis-point emergency cut to interest rate, lowering its benchmark rate to 0.25 per cent. This is allowing buyers to borrow greater amounts of money at a lower cost over time. The institution has also pumped billions of liquidity into the financial system, making lenders more confident in issuing loans.
The federal government has employed measures to prevent a full-blown economic meltdown. Canada Mortgage and Housing Corp. (CMHC) has supported lenders to cover the cost of mortgage deferrals. In a broader policy tool, the government implemented a wage subsidy program to help employers keep staff on payroll, helping millions continue to collect paycheques and cover their bills.
According to the Canadian Bankers Association (CBA), approximately half a million big-bank borrowers have been approved for mortgage payment deferrals during the pandemic. Banks are ostensibly already planning to work with customers in establishing flexible repayment plans. This has prevented homeowners from flooding the market with properties to avoid defaults.
Put simply, there are still plenty of buyers due to the market-friendly monetary and fiscal conditions driven by Ottawa and the central bank.
The Use of Technology in Real Estate
Another reason for the healthy level of activity within the Toronto real estate market is the commendable and innovative solutions adopted by real estate professionals to help transactions take place as smoothly and safely as possible.
The sector has done an incredible job adapting to the situation. At the beginning of the pandemic, the Ontario government announced that real estate offices were an essential service, allowing them to continue operating during this chaotic time. But the real estate industry has taken other necessary precautions as well.
To mitigate any health risks, realtors have utilized technology to support the home-buying process. They have leveraged digital listings, virtual tours, video conferencing, e-document and electronic signatures. When in-person showings are required, agents have continued to show properties under strict safety measures that include wearing face masks and gloves, having scheduled appointment, and showing the house or unit to no more than two adults at a given time.
What is the Future of Toronto Real Estate?
Over the last 6 weeks, there have been some dire projections for Toronto and the national real estate market. However, as the plethora of economic data has already highlighted, many of the findings are a lot better than what was forecasted earlier in the pandemic. Although the industry consensus is that the future is uncertain, the economics of the outbreak suggests it is not all storm clouds ahead. The fundamentals of the housing market are the same as they were before the pandemic: a huge demand and a short supply. This has not changed, and until it does, you can expect real estate prices in Toronto will not crash.
Real estate listings up in June 2020 over last year, housing report says | CTV News – CTV News
While more homes were sold last month, total sales figures are still off from last year and COVID-19 has a lot to do with it, again.
The Calgary Real Estate Board (CREB) says monthly sales were down by two per cent in June compared to 2019.
Experts say price declines, easing mortgage rates and fewer social restrictions have helped.
“However, the market remains far from normal. Challenges, such as double-digit unemployment rates, will continue to weigh on the market for months to come,” said Anne-Marie Lurie, chief economist for CREB.
The report shows six per cent more homes were listed last month over June 2019, but the benchmark price of a home in Calgary is still down from last year.
The benchmark price is $411,300 while the average home price in the city of Calgary is $460,442.
Sales in other regions outside of Calgary weren’t much better, CREB says. Airdrie’s sales activity was eight per cent lower than last year and sales in Okotoks are well below the 2019 levels and long-term trends.
The housing market in the town of Cochrane fared a bit better, but the increased sales (76) did little to offset inventory, considering 136 new listings were added in the month.
Mississauga man accused of using real estate transactions to commit sexual assaults in Hamilton – Global News
Hamilton police have made an arrest in what they say is a string of sexual assaults that were allegedly committed under a ruse involving real estate transactions.
Detectives say the investigation started last November after reports of two sexual assaults at homes in the area of Pearl and Peter streets.
On Monday, there was a similar complaint about an incident in the same area.
No one was physically injured in any of the incidents.
The investigation led to a Mississauga man being identified and arrested without incident at his home.
Mordecai Berlad, 58, has been charged with three counts of sexual assault and one count of forcible confinement.
Officers think there may be other victims and are urging anyone with more information to contact Det. Const. Buszkowski of the HPS sexual assault unit at 905-540-5543 or anonymously contact Crime Stoppers online or by calling 1-800-222-8477 (TIPS).
© 2020 Global News, a division of Corus Entertainment Inc.
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