While there were a few bright spots in April’s housing market data, it was mostly as grim as expected with local markets across the country freezing up while business shutdowns and strict social distancing measures took their toll on home sales.
According to national data released today by the Canadian Real Estate Association (CREA), home sales fell 56.8 percent last month over March, the sharpest drop ever recorded on a monthly basis and the lowest sales volume posted in April since 1984.
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Toronto, Montreal and Vancouver — the nation’s largest housing markets — saw the most significant sales declines, at 66.2 percent, 64.4 percent and 57.9 percent, respectively.
The number of newly listed properties also took a hit in April, falling 55.7 percent compared to March figures. Meantime, national home prices held steady with the MLS Home Price Index recording a slight 0.6 percent decline over March and rising 6.4 percent year-over-year.
Housing market observers knew a substantial country-wide drop in sales was coming, as local real estate boards already reported their activity numbers for April earlier this month. The decline in listings is close to matching the falls in sales activity, an encouraging trend highlighted by economists in early May that has thankfully also shone through in the national-level data.
In a BMO report published earlier this month, Senior Economist Robert Kavcic pointed out that new home listings are sharply declining alongside home sales which likely means that “the deterioration in prices should be contained for now.”
“Contrast that to 2008/09, when sales fell by almost 40 percent from the end of 2007 to the 2009 lows, but new listings rose by 15 percent through the early stages of that period — that’s how you get a quick and meaningful decline in prices,” Kavcic wrote.
For its part, CREA reported in its data release this morning that May market figures are expected to show an improvement over April’s results.
“Like so many other parts of normal daily life, a lot of buying and selling activity in housing markets across Canada has been put on pause,” said Shaun Cathcart, CREA’s Senior Economist, in a media release.
“That said, preliminary data for May suggest things may have already started to pick up a bit for both sales and new listings, in line with evidence that new and existing virtual technology tools have been adopted by REALTORS® and their clients. These tools have allowed quite a bit of essential business to safely continue, and will likely remain key for some time,” Cathcart continued.