March 2020 – Market Anaylsis
March 2020 Review
Despite growing concerns about the COVID-19 situation, on the Toronto Regional Real Estate Board (TRREB) there was a 12.3 percent increase in the number of sold properties throughout March 2020, compared to March 2019. When examining March 2020 in greater detail we note that much of the transaction history was driven by the front end of March 2020 with an approximate 30% decrease in the number of sold properties on a weekly basis when examining the later weeks of March 2020 when COVID-19 restricted mobility among buyers and willingness for Seller’s to list their properties.
Interest Rate Cuts and Overall Economic Activity
The Bank of Canada continues its attempt to prop up the economy by lowering its interest rates. This was done numerous times over the course of March 2020 as the COVID-19 pandemic and its economic impact became evident. The corresponding interest rate cuts have not always been passed onto consumers by the Big Five Banks. Unprecedented economic challenges have occurred as a result of social isolation measures creating a sense of uncertainty among most industries; the real estate sector has not been exempt from this uncertainty. Historically real estate has been a sector that investors have flocked to during economic uncertainty; however, with the impact of COVID-19 being unknown and mobility of market participants being reduced we have yet to determine if this will once again be the case.
Increasing Sale Prices
Comparing March 2020 to March 2019, the year-over-year average selling price for all home types combined continued to increase by 14.5 percent.
There was a moderate 3.0 percent increase of new listings recorded on TRREB’s MLS, comparing March 2020 to March 2019. Much of this can be attributed to a “holding pattern” which has evolved in the greater market for seller’s that are not in a position that they are required to sell.
Is Now a Good Time to Act?
During these challenging times there may be opportunity purchases that can be made if one is looking to expand their real estate portfolio. Outside of expanding your real estate portfolio, we recommend observing the market for the next two to six weeks as we would then be in a better position to determine the opportunities that may exist as a buyer along with the benefits as a seller.
March 2020 – Market Analysis
Monthly Percentage Change in Number of Units Sold – March 2020 – Illustration A
Month-Over-Month Average Price Percentage Change – March 2020 – Illustration B
Seasonally Adjusted Month-Over-Month Average Price Percentage Change – March 2020 – Illustration C
Monthly Percentage Change in Average Sale Price – March 2020 – Illustration D