As the COVID pandemic continued to impact the economy in May, activity in the housing market continued – though at a much different pace than in the year prior.
Home sales in the Greater Toronto Area (GTA) last month were down 53.7% compared to May 2019, which was basically on par with the number of recorded resale home listings, which dropped 53.1% annually last month, according to a new report from the Toronto Regional Real Estate Board (TRREB).
But 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 still less than the drastic 67.1% year-over-year decline reported for April 2020. What’s more, the number of new listings rose 47.5% on a month-over-month basis, the real estate board said.
In other words, while May was by no means a banner month for Toronto area real estate, it was better in nearly every way than April, suggesting that the market may be starting to look past COVID-19 and all its implications.
While sales and new listings were down in May, the average selling price of new homes increased slightly by 3% year-over-year to $863,599, and up 4.6% from April. The benchmark price for new listings – considered the price of a typical home in a given area – was virtually unchanged from April, but rose 9.4% year-over-year.
The board said the difference in year-over-year growth and the average selling price could be related to the decline in detached-home sales in Toronto, which were down by a greater annual rate than overall sales in the GTA.
“With home sales and new listings continuing to trend in unison in May, market conditions remained balanced. This balance was evidenced by year-over-year average price growth slightly above the Bank of Canada’s long-term target for inflation,” said Jason Mercer, TRREB’s Chief Market Analyst.
“If current market conditions are sustained during the gradual reopening of the GTA economy, a moderate pace of year-over-year price growth could continue as we move through the spring and summer months.”
When looking at the prices within the different segments of the market, the average price of a detached home in Toronto rose 2.7% to $1.42 million in May, compared to the region-wide average that fell -0.9% to $1.03 million. Condos also continued to see price gains, with the average price increasing 6% across the region to $625,445, while condo prices in Toronto, on average, rose 5% to $674,028.
As for the rental market, the average rent for a one-bedroom condo fell -5.1% year-over-year in May to $2,086 on average, while the number of one-bedroom rental transactions fell -30.8% annually across the GTA.
Average rents for two-bedroom units fell 5.6% to $2,740, with a 26.7% year-over-year reduction in the number of new transactions. However, the board says that, similar to home sales, there was a “marked improvement” in rental transactions in May compared to April, with nearly double the number of condos leased.
“While the public health and economic concerns surrounding COVID-19 continue to impact the housing market, the May sales result represented a marked improvement over April,” said TRREB President Michael Collins, adding, “providing we continue to see a gradual re-opening of the economy, it is very possible that home sales will continue to improve in the coming months.”