BUSINESS
04/15/2020 10:14 EDT | Updated 04/15/2020 10:14 EDT

Canadian Home Sales Dropped 14.3% In March, But Worst Is Yet To Come

The data reflects "the pre-COVID-19 reality, which we are no longer in."

Ricky Deacon via Getty Images
In this undated stock photo, condo and apartment buildings are seen in Vancouver's Yaletown neighbourhood. 

MONTREAL ― Much of the country’s regular springtime home-sales activity has been put on hold as Canada rides out the effects of the COVID-19 pandemic. 

Home sales are projected to drop by half after sliding 14.3 per cent in March ― a number that only partly reflects the historic downward swing the market has seen, the Canadian Real Estate Association says.

“Numbers for March 2020 are a reflection of two very different realities, with most of the stronger sales and price growth recorded during the pre-COVID-19 reality which we are no longer in,” said Shaun Cathcart, senior economist for the Canadian Real Estate Association, in a statement Wednesday.

Watch: What’s happening to Canada’s housing market in the pandemic? Story continues below.

 

“The numbers that matter most for understanding what follows are those from mid-March on, and things didn’t really start to ratchet down until week four. Preliminary data from the first week of April suggest both sales and new listings were only about half of what would be normal for that time of year.” 

In some markets, the situation as of early April appeared to be even worse, with data suggesting Toronto home sales were down 76 per cent in the week ending April 5

Thanks to half a year of strong price growth before the virus hit, house prices in Canada were considerably higher in March than a year earlier, up 12.5 per cent to an average of $540,000 across the country.

“The impact on housing prices will likely take a little longer to become apparent. Price measures for March 2020 were strongly influenced by very tight markets and a very strong start to the spring market in many parts of Canada before physical distancing measures were implemented,” CREA said in a statement.

It noted that the number of homes listed on the market dropped in March by almost as much as sales. That means the market balance remained unchanged in March, despite the drop.

“Based on a comparison of the sales-to-new listings ratio with the long-term average, two-thirds of all local markets were in balanced market territory in March 2020. Virtually all of the remainder continued to favour sellers.”

That may not be the case for long. Real estate portal Zoocasa declared Toronto housing to be a “buyer’s market” after analyzing data for the second half of March.