The Toronto Regional Real Estate Board has revised its2020 forecast of 10 per cent price growth as COVID-19 sent real estate sales plunging 69 per cent year over year in the first 17 days of April.
The average selling price for homes also dipped 1.5 per cent to $819,665, according to a special mid-April market update released on Wednesday.
The board now expects home prices to finish out the year at 2019 levels, instead of the originally forecast $900,000 average.
Listing prices showed a similar drop in the first part of this month.
The board’s revised expectation takes into account a roaring 15 per cent year-over-year price gain in the first quarter. More recently though, COVID-19 restrictions have severely curtailed real estate activity, said board president Michael Collins.
“Home buyers and sellers have concerns about the economy and, indeed, their own employment situations. On top of this, many buyers and sellers are avoiding any type of in-person interaction. In the condo market in particular, individual condo corporations have curtailed entry for non-residents,” he said in a news release.
The board forecasts a return to housing activity if public health restrictions loosen in the summer, leading to an acceleration of sales in the fall. Some price declines could appear into the second and third quarters of the year, however.
“But these declines will have less of an effect on the overall price for 2020 because the annual share of sales will also be much lower than normal,” said a news release.
New listings went the way of sales, plummeting 63.7 per cent to 3,843 in the Toronto region between April 1 and April 17, a period that is traditionally part of the housing market’s busiest season.
When buyers get back in the market, there will be a pent-up demand for homes, said TRREB chief market analyst Jason Mercer.
“Increasingly those buyers will be faced with the persistent lack of listings inventory that was a serious problem before the (onset) of COVID-19,” he said.
The market update shows that detached house prices have taken the biggest hit, declining 9.1 per cent to $1.26 million on average in the city of Toronto. There was a drop in the number of homes that sold in the city for more than $2 million, bringing down the overall average, says the real estate board.
Across the Toronto region, detached houses sold for 4.6 per cent less year over year, averaging $990,543.
Even condos, which have consistently increased in value, saw a drop in the average selling price of 1.8 per cent to $578,594 in the GTA and a 2.9 per cent decline to $617,246 inside Toronto’s borders.
Those units typically attract a lot of first-time buyers, who can wait for more certainty in the market, said the real estate board.
Last week, Royal LePage projected that housing prices could still grow 1.5 per cent this year if the pandemic recedes by the end of the second quarter.