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The COVID-19 outbreak in March had and still has a tremendous impact on the way we live, work, run our businesses, and spend our free time. Keeping our social distance, avoiding touching public surfaces and not leaving the house unless necessary has affected the global economy, our daily routines and many businesses, including the real estate market.
However, as the government restrictions are slowly being lifted, we are also seeing more buyers and sellers returning to the market after the dramatic slowdown in mid-March and April. Let’s take a closer look at what happened and what buyers can expect in the meantime.
Home sales and listings plummeted drastically but market activity is slowly increasing
Since mid-March 2020, we have seen home sales drop to record-lows. With the many restrictions and policies in place, and people avoiding unnecessary contact with others, the majority of GTA homebuyers and sellers, facing uncertainty, decided to put their home sale or home purchase on hold for a while.
This led to a major slowdown, and sales and new listings in the GTA decreased by up to 60% in the second half of March and April. However, with the restriction measures against the virus gradually lifting up, buyers and sellers are slowly coming back. This is mostly visible when looking at the activity in May when new listings and the number of sales climbed by 30% in comparison to April. While this is good news, the real estate market activity is still far from pre-COVID-19 activity levels, so it will take some time to get back to the point where we were.
Prices did not go down in the GTA and they probably won’t
Most of the GTA did not see prices going down (with the exception of a few neighbourhoods) which only proves that, despite slower activity and a major health crisis, the market remained competitive and robust. High-in-demand areas, like Burlington, Oakville, Toronto, Mississauga, etc., saw a significant year-over-year price increase (i.e., 7%-10%). This should not come as a surprise though given that the shrinking number of homebuyers and sellers was relatively proportional, so it did not particularly affect the supply-and-demand ratio.
GTA homebuyers can count on lower mortgage rates
Buyers may not have seen a drastic price decrease, but they can still take advantage of the recent cuts in mortgage rates. Responding to the COVID-19 crisis, the Bank of Canada lowered its mortgage rate gradually by 1.5% in the past few months to help homeowners and new mortgage borrowers cope with the new state of play. If we add the fact that there is less competition currently, it could be the perfect opportunity for GTA homebuyers to enter the market and secure a good mortgage deal as they often feel stretched to afford their GTA dream home.
For more info on the GTA real estate market, current GTA listings and available properties, contact us here.