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Despite coronavirus, GTA real estate prices are rising slightly

CMHC warns COVID-19 could lead to huge losses in real estate market
WATCH ABOVE: CMHC warns COVID-19 could lead to huge losses in real estate market

Despite the economic chaos caused by the novel coronavirus, home prices in the Greater Toronto Area are up slightly from this time last year, data obtained by Global News shows.

The modest increase was seen both in the Toronto-area 905 suburbs and also in the 416 area code.

In the 416, condo prices were up 1.8 per cent in the first two weeks of May, compared to the same period in 2019, and detached houses were up 2.6 per cent, though only 198 properties in that category were sold.

In GTA 905 communities like Peel and Durham, condo prices were up 3.4 per cent and detached houses were up 0.9 per cent.

However, far fewer homes are being bought and sold: the GTA had only 2,005 residential properties sold in the first two weeks of May, as opposed to 3,477 in the first two weeks of February.

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How COVID-19 is impacting Toronto real estate
How COVID-19 is impacting Toronto real estate

Agents who Global News talked to said that while showings now take place under very restrictive rules, it’s easier than it was under the total ban in March as Canada moved to respond to the pandemic.

“There was a lot of uncertainty because we were not allowed to do any showings,” says agent Nuria Cano Ortiz. “If you can’t do showings, most of the sellers that have their properties on the market just terminated the listings.

“It makes sense: nobody is going to buy a house without really seeing it.”

Still, the rules agents now work under are very time-consuming to comply with.

“It’s very challenging because no more than two adults are allowed in the house. Children are not allowed in the house. We have to go with masks, and we have to have either gloves or sanitizer and only one appointment per time frame.”

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“In the past, you could book appointments for an hour. Now the showings are half an hour so that we don’t overlap.”

Despite that, agents say they’ve seen markets bounce back to something similar to what they were like before the pandemic.

Real estate agents continue work with virtual tours and heightened safety measures
Real estate agents continue work with virtual tours and heightened safety measures

“Who knows what’s going to happen later?” asks Ortiz. “But right now, it’s pretty steady.

“Any listing that’s going on the market is holding back and getting offers, and they’re getting 20-25 offers. There are 25 people offering on the house, there are 24 who are not getting the house and going to the next house.”

Agent Rodelio Cuevas says he’s seen demand come back in the past two weeks:

“Last night, I was in a multiple-offer situation — a first-time homebuyer’s place where we had 15 showings in one day. It is a surprise, but there are a lot of buyers.

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“There are people who are really anxious to get into the market right now because of low interest rates. That’s the main factor, in my opinion.”

Matt Lee looks at changes in the real estate world during COVID-19
Matt Lee looks at changes in the real estate world during COVID-19

Agent Karen Millar has seen a similar pattern.

“I have multi-offers in many of the areas that have always been the most popular,” she says.

“In East York, there are million-dollar properties with multi-offers. In neighbourhoods that have always been in demand, I don’t see any downward pressure.”

There are more opportunities to buy condos than single-family homes as rental markets soften, Cuevas says.

“There are a lot of vacancies in condos at the moment.”

But the pandemic isn’t going away any time soon, and agents were reluctant to predict what it would mean for Toronto-area real estate markets as time goes on.

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Last week, the Canada Mortgage and Housing Corporation took a bearish view, warning of a drop in home values of nine to 18 per cent over the next two years, which it said could make a dangerous combination with high levels of consumer debt and high unemployment.

CMHC warns COVID-19 could lead to huge losses in real estate market
CMHC warns COVID-19 could lead to huge losses in real estate market

“I think we’re more in wait-and-see mode,” Ortiz says. “We’re going to have a lot of action right now. I think it’s going to last until the next flu season, that could be another COVID season, and that would really be bad for us.”

READ MORE: As Canada reopens, are we ready for a ‘second wave’ of coronavirus infection?

Cuevas was also reserved.

“I am optimistic that the market will swing up, but I don’t think it’s going to be a normal market,” he says. “It’s going to be a challenge. It’s not going to be anything normal.”

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Global News got access to Toronto real estate sales data after the Supreme Court declined to hear an appeal by the Toronto Real Estate Board against a decision by the federal Competition Bureau in 2018. TREB (now the Toronto Regional Real Estate Board) was fighting to keep access to the data closed.

READ MORE: Supreme Court decision clears the way for Toronto realtors to publish home sales data