Hannah Betel May 19, 2020 No Comments
In April, 16.6K seasonally adjusted sales were completed across the country according to the Canadian Real Estate Association (CREA).
The last time we saw sales fall to these kinds of low levels was December 2008 – in the immediate aftermath of the 2007-8 recession. At the time, the blip in sales quickly turned into a historic bull run in real estate values, activity, sales, and enthusiasm which was effectively sustained right up until the cool down in the market in 2018. We can’t predict the future but if economic activity stabilizes it’s likely that the housing market will recover with similar levels of gusto and force as in the last major financial and economic downturn. 
It’s important to note that the pace of sales price changes in the immediate aftermath of the 2007-8 soared. From lows of 40% declines in sales at the end of 2008, to sales increases at over 70% by late 2010. 2013-16 saw a sustained boom in housing that routinely saw sales increases in the 5-20% increase year on year. In Toronto alone, the number of housing sales was just over 2,500. This equates to a 69% decline, only exceeded by Montreal. The lowest fall in sales occurred in Winnipeg, where a less than 40% decline was noted. Manitoba has not been hit particularly hard by COVID-19, with most of the damage being felt by Ontario and Quebec. Manitoba went as far as voicing its preference to potentially shutting down non-essential border traffic with Ontario.
While the sheer number of housing sales has fallen precipitously, prices and demand are effectively frozen in place. Luxury sales and buying is still healthy, and by many indicators is and will do better as skittish capital rich individuals from abroad move their money into Canadian real estate. Highlighting the importance of construction, Ontario never fully locked down the construction sector – pieces of it were deemed essential from the get-go. As of May 19th, most construction activity will return to normal. This is good news for the market as it proves that the supply equation will not evaporate to the extent that buying transactions have. Overall, our housing market has held firm against the onslaught of COVID-19, and is likely simply in a deep freeze. 

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