After 2.5 months of isolation and social distancing, Toronto tentatively sets dates for reopening a few services at a time, but there’s no return to ‘normal’ in sight yet.
There was an interesting debate last week between a few real estate professionals, mortgage lenders, and the CMHC. The agents and lenders took issue with a CMHC special report that predicted price declines in the GTA, arguing that prices have held steady thus far, and the small number of new listings coming to market will keep it that way as buyers trickle back from their social distancing. However, Evan Siddall (CMHC) warned that talk like that is dangerous and misleading, tweeting: “Some vocal real estate advisors have labeled us ‘panic-inducing and irresponsible,’ saying essentially that house prices don’t go down. They’re whistling past the graveyard and offering no analysis. Please question the motivation of anyone who wants you to believe prices will go up (yes, up) with our economy in slow motion, oil being given away, millions of Canadians on income support and a greater % of mortgages not being paid than we’ve seen since the Great Depression.”
It is true that reduced supply and buyer eagerness may keep prices aloft for a while, but CMHC is right to be wary; anyone claiming that the real estate industry is somehow immune to the economic slump the rest of the country is experiencing is not being truthful or prudent in the information they are sharing. That said, being overly pessimistic could panic the public (particularly the section who still has purchasing power) into creating a housing crash – a self-fulfilling prophecy of sorts. The most truthful piece of information to be spoken during the debate? A pandemic like this is unprecedented, and so, only time will tell. Predictions are simply that: predictions.
Transparency is the most important pillar of real estate professionalism. Urbaneer remains, as ever, your resource for real estate in Toronto – call or email us any time with your questions! We are here for you and yours!
Here’s the Toronto Real Estate Board’s analysis for May 2020, as well as the entire calendar year, with graphics courtesy of Market Watch:
TORONTO, June 3, 2020 – Toronto Regional Real Estate Board President Michael Collins announced that Greater Toronto Area REALTORS® reported 4,606 sales in May 2020. This result was down by 53.7 per cent compared to May 2019. While the number of sales was down substantially on a year-over-year basis due to the continued impact of COVID-19, the decline was less than the 67.1 per cent year-over-year decline reported for April 2020.
On a month-over-month basis, actual and seasonally adjusted May sales were up substantially compared to April. Actual May 2020 sales increased by 55.2 per cent compared to April 2020. After accounting for the regular seasonal increase that is experienced each year between April and May, seasonally adjusted sales were up by 53.2 per cent month-over-month.
The number of new listings entered into TRREB’s MLS® System in May was down by a similar annual rate to that of sales, dipping by 53.1 per cent to 9,104. On a month-over-month basis, actual new listings were up by 47.5 per cent.
The MLS® Home Price Index Composite Benchmark price was virtually unchanged in May 2020 compared to April 2020. On a year-over-year basis, the composite benchmark was up by 9.4 per cent. The average selling price for all home types combined was up by three per cent compared to May 2019 to $863,599. On a seasonally adjusted basis, the average selling price was up by 4.6 per cent month-over-month compared April 2020.
The difference in year-over-year growth between the MLS® HPI Composite Benchmark and the average selling price was related to the fact that home sales in the City of Toronto, particularly in the detached segment, were down by a greater annual rate than overall sales in the GTA. This resulted in a compositional impact on the overall average selling price.
If you’d like to see more in depth figures – by housing type and/or geographical area – here’s the complete set of May 2020 TREB Stats.
And here’s an infographic form Bosley Real Estate! Easy peasy!
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Steven Fudge, Sales Representative
& The Innovative Urbaneer Team
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