Residential Market Commentary - March limps away
As the old saying goes, March comes in like a lion and goes out like a lamb. For Canada’s housing market, that is all too true this year. And the country’s two biggest markets make it abundantly clear.
The Canadian Real Estate Association reported strong year-over-year sales gains of 26% coming out of February. The Toronto Region Real Estate Board clocked-in with a 49% y/y increase for the first 14 days of March. But then COVID-9 entrenched itself as a bitter reality and things slumped.
Government imposed shutdowns and the implementation of social distancing have pretty much ended open houses and any face-to-face meetings with clients for both realtors and mortgage brokers. Real estate boards across the country have banned such interactions or are strongly recommending against them.
The Toronto-area market plunged in the second half of March, with sales falling to 16% below year ago levels. The month ended with a 12% gain over March of 2019. By comparison, February ended with a 44% increase over a year ago. A rough calculation by one of the big banks puts March activity at 23% below February.
The country’s other hot market, Vancouver, experienced a similar second half collapse in March, but came out of the month with a 46% increase in sales activity. That number is tempered, though, by a particularly weak March, last year.
Market watchers expect a continuing slowdown as the COVID-19 outbreak worsens and anti-virus measures intensify. They caution that property values will likely come under increasing downward pressure and that extremely light activity will make the market vulnerable to erratic price moves.