In mid-March, Ontario declared a state of emergency due to COVID-19, and within three weeks, the Bank of Canada cut the overnight interest rate to a decade-low of 0.25%, and half a million homeowners deferred their mortgages. As expected, many buyers and sellers suspended their home searches and sales in response to public health and safety measures, and uncertain economic conditions.
To understand how market activity and housing competition conditions for detached properties evolved during Ontario’s state of emergency, Zoocasa tracked sales and new listing data from the Toronto Regional Real Estate Board on a biweekly basis and compared the figures to 2019 activity for the same timeframe.
Zoocasa found that after hitting a trough in April, sales and new listings for detached houses in all five GTA regions rose steadily through May and June. In each GTA region (City of Toronto, Peel Region, York Region, Durham Region and Halton Region), the gap between 2020 and 2019 sales was widest between early April and early May, with sales dropping by as much as 75%. In every region, the extensive sales gap started to close by the latter half of May, and by mid-June, sales even outpaced 2019 levels for the same period in some GTA markets like Halton and Durham.
In June, new listings recovered to at least 75% of last year’s levels in each GTA region. This followed a steep drop in listings between early April and early May in every region; as low as 26% of 2019 levels in York Region, where new listings were most impacted.
Zoocasa also calculated the sales-to-new-listings ratio (SNLR) in each market to get a sense of whether competition for detached houses was balanced, or to identify regions where competition conditions favoured buyers or sellers. SNLR is calculated by dividing the number of sales in a period by the number of new listings.
Prospective home buyers and sellers should keep in mind that our analysis covers trends at the regional level. Buyers and sellers will benefit from a more in-depth review of sales and new listings trends to uncover nuances for specific home types of interest at the city, town or for neighbourhood level.
Competition for City of Toronto Detached Housing Balanced; June Sales Recover to 87% of 2019 Levels
After hitting a low point in April, sales for detached houses in Toronto began to recover through May and June. For the period between June 8-21, sales for detached houses in the region recovered to 87% of sales during the same period last year, providing a strong signal that more home buyers are gaining confidence and returning to the market.
Similarly, more sellers began listing their homes in May and June, with 862 new listings added between June 8-21, alone. This was 3% more than the number of detached homes listed between March 2-15, which were the last two full weeks before Ontario declared a state of emergency. The volume of new listings between June 8-21 reached 81% of 2019 levels; a striking contrast to the weeks between early April and early May when new listings were only at 30% of last year’s volume.
With sales and new listings rising at the approximately same pace, the detached house market in Toronto was in balanced territory in June with an SNLR of 47% for the June 8-21 period, compared to 45% for the same period last year. A balanced market occurs when the SNLR is between 40-60% and indicates that there was enough available supply to meet buyer demand.
“Based on the recent traction we are seeing in the market, although demand is not quite at pre-emergency levels, it certainly feels as though we are heading back in that direction,” said Emma Pace, a Zoocasa agent in the City of Toronto.
Peel Region Reverts to Balanced Conditions for Detached Houses After Experiencing a Buyer’s Market in Late March and Early April
Between June 8-21 this year, 701 detached houses were listed in Peel Region, signifying a recovery to 88% of new listing levels for the same period in 2019, and marking the highest number of new listings hitting the market since the provincial state of emergency was declared. While not quite at pre-emergency figures just yet, there was steady growth in listings throughout May and into June.
Home sales followed a similar pattern – after reaching a low point between March 30 – April 12 with only 97 transactions taking place, sales picked up and are now at 89% of 2019 levels, and 10% lower than the level of sales during the two full weeks prior to emergency measures being announced (March 2-15).
Despite COVID-19, housing competition in the Peel Region was balanced in June 2020. Peel Region had an SNLR of 53% for June 8 – 21 this year, unchanged from last year, and 49% between March 2 – 15, 2020. As such, competition experienced by buyers active in the market this June was similar to what buyers experienced in June last year, and also to what buyers experienced as the spring market was ramping up this year, pre-emergency.
York Region More Competitive Than 2019 For Buyers As Detached Sales Recover to 95% of Last Year’s Levels
“There seems to be a resurgence in demand for York Region detached properties due to the pandemic,” said Claudio Castro, a Zoocasa agent in York Region. “As more people recognize that they may not need to be in the office 5 days a week for the foreseeable future, many are revisiting detached properties in the region so they can have more space.”
In 2019, York Region was in buyer’s market territory between March and June, meaning the SNLR was under 40% and buyers had more leverage as the available supply outpaced demand in the region.
For the same period in 2020, the market exhibited mostly balanced conditions, with the most recent biweekly period of June 8-21 at an SNLR of 46%. Sales were back up to 95% of 2019 levels during this two week period in June; recovering from a low of being at 28% of 2019 levels between April 13-26.
New listings improved over the course of May and into June in York Region, and were at 80% of 2019 levels for June 8-21 period. By comparison, between March 2-15, the last two full weeks prior to the emergency, new listings had been up 132% compared to last year.
Durham Region A Seller’s Market with Sales in June Outpacing 2019 Levels and New Listings Slower to Catch Up
In Durham Region, sales for detached houses were 8% higher than 2019 levels during the period between June 8-21 with 385 transactions taking place. These sales are comparable to the final two weeks pre-emergency, when 394 detached houses changed hands. Sales were at their lowest point between March 30 and April 12, when the volume of detached sales was only 45% of 2019 levels across the region.
Despite strong demand from buyers, sellers were relatively less enthusiastic in the region. With 592 new listings posted between June 8-21, new listings were at 75% of 2019 levels for the same period. As new listings failed to keep pace with sales, Durham Region was a seller’s market between June 8-21 with an SNLR of 65%, compared to the same period last year when the Region was in balanced market territory (SNLR of 45%). A seller’s market – where the SNLR is over 60% – is one where sellers have more leverage because available supply is lower than the demand for homes during a period of time.
“With such low inventory in the region, the atmosphere is cutthroat,” said David Micek, a Zoocasa agent in Durham Region. “The majority of homes are selling in under 7 days, and clients waiting until the weekend often find themselves on the outside looking in with houses selling before they can even visit.”
According to Micek, by this time of year, bidding wars typically tend to taper off as listings increase. This year, however, low available inventory coupled with COVID-19 restrictions meant buyers needed to adhere to showing restrictions and offer nights among other criteria set by sellers.
Halton Region Detached Sales Overtake 2019 by 22%; New Listings Show Strongest Recovery Among GTA Regions
Halton Region showed the strongest sales recovery among GTA regions, with sales comfortably outpacing 2019 levels as of the period between June 8-21. 291 detached houses sold during this two-week period compared to 238 the year prior, a 22% increase y-o-y. Sales in the region now match pre-emergency levels; 287 detached houses sold between March 2-15 this year.
“After COVID-19, buyers and sellers are eager to move forward into their next chapter, and this translated into a surge in sales activity in the region once people became more comfortable with the emergency measures in place,” said Alex Kupiec, a Zoocasa agent in Halton Region.
New listings for detached houses nearly kept pace with 2019 levels, with 465 listings coming onto the market between June 8-21, reaching 90% of what was listed during the same period last year. However, strong buyer demand relative to limited available inventory meant that Halton Region nudged into seller’s market territory with an SNLR of 63% for the period of June 8-21. Buyers last year faced less competition for detached homes during this time period last year when the SNLR was 46%.
“A lack of listings since mid-March resulted in a backlog of buyers contending for a very limited amount of inventory,” said Kupiec. “For buyers in particular, there is currently almost a mindset of a delayed spring market; they are ready to make a move and compete.”
Sales and new listings data were sourced from the Toronto Regional Real Estate Board (TRREB) on June 25, 2020. Sales numbers for each biweekly period are based on the sold date.
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