MONTREAL ― It didn’t take long for the coronavirus pandemic to tilt Canada’s long-resilient housing markets into a downturn.
Prices fell in almost every major housing market in the country in April, with Toronto leading the way, data from the Canadian Real Estate Association (CREA) shows.
The national average selling price fell 10.9 per cent, on a seasonally adjusted basis, to $475,310 in April from $533,504 in March. Thanks to earlier strength in the market, that’s just 1.3 per cent lower than a year ago.
Of the large metro areas, Toronto saw the steepest selling price drop, with the average dropping 11.8 per cent, to $789,274 for all housing types.
That was followed by Ottawa, where prices tumbled 9.6 per cent, to $462,000. The average selling price in Vancouver fell 6.2 per cent, to an average of $1,009,570.
Falling average price numbers don’t necessarily mean sellers are slashing their asking prices. They can also reflect a change in the mix of housing that’s being sold. Recent numbers suggest high-end home sales have fallen more than others, which would drag down the average price.
“Indeed, with activity shrinking so dramatically and likely to stay depressed for several months, average prices will likely be distorted, and not fully represent broader market conditions,” TD Bank senior economist Brian DePratto wrote in a client note.
Home sales were down 57.6 per cent nationwide, compared to the same month a year earlier, to the lowest sales total since 1984.
“The flip side is that, given the nature of this shock, new listings plunged by 56 per cent in the month and were down 59 per cent from a year ago. … the monthly market balance hasn’t deteriorated all that much,” BMO economist Robert Kavcic said.
The lack of new listings “reiterates that the housing market has, in unprecedented fashion, effectively shut down and closed for business.”
“The real question is how the market will evolve when lockdowns are lifted and activity can re-start with some semblance of normalcy,” Kavcic wrote in a client note Friday.
“That is, it’s going to be a race between sales and listings out of the gate to determine how the market balance shapes up, and where prices move in the near term.