COVID-19 Pandemic Impact on GTA Real Estate Market
In April 2020, when the COVID-19 froze and world the GTA real estate market, home sales dipped over 67% in the region. Although the demand for low-rise houses increased in the second half of the year, prices fell by around 10% from the peak in early 2020.Condos for sale were slow to sell, but the condo market rebounded quickly when there was a sudden surge in interested inventors.
The Beginning of 2020
As the world, including the Greater Toronto Area (GTA), paid little attention to coronavirus, which started in China, the GTA Market experienced a boom during the start of 2020. Many houses were receiving 20 to 30 offers, and several of them were being sold at above the average market price.
As per our reports, more than 15% of homes and pre-construction condos were sold above the asked price in 2018-2019. The percentage rose to over 50 in the first quarter of 2020. The average prices were up by around 15% during this period.
The Arrival of COVID-19
When the GTA real estate market was enjoying the surge, nations like China and Italy were battling against the deadly virus. However, it didn’t last for a long time. In mid-March, the region started noticing the impacts of coronavirus. Offices and people were asked to work from home. The GTA realtor started to experience the consequences from April when sales dropped by more than 65%.
During this time, the real estate market had frozen. Buyers were avoiding going out to search for new houses. Even the sales for pre-construction condos had dropped drastically.
Forecasts by Experts
By May, realtors, housing analysts, and banks started to predict the future of GTA’s real estate industry in the wake of lockdown and a rising number of coronavirus cases. Many of them forecasted the sales to remain flat or decline a little.
The positive statement came from Toronto Dominion (TD) Bank, which predicted house prices to surge by 8% even during the pandemic times. On the other hand, the Canadian Mortgage and Housing Corporation (CMHC) forecasted a drop of at least 9%.
The Bounce Back Begins
Despite the speculations, the real estate market saw a sudden surge in August. It was found that sales had gone up by around 40% over the last year, and half of the on-sale homes had received more than asked prices. This happened when the unemployment rate in Canada was high and many homeowners were deferring the mortgage payments.
According to experts, there were multiple reasons behind the surge in homes and condos for sale. They included:
- The competitive housing market of GTA
- Work from home.
- Employment rate change
Condo Market Rebound
Even in the second half of 2020, the GTA’s condo market experienced a rise. According to experts, it happened because of the low prices of condos and optimistic investors who believed that condo prices could rebound.
The COVID-19 pandemic affected the GTA’s real estate world, but optimistic realtors and buyers didn’t let go off the track for a long time.