House prices officially dropping in Mississauga amid COVID-19 outbreak
If there's one thing that can cool a red-hot housing market, it's a global pandemic.
As governments continue to emphasize—and legislate—strict physical distancing measures in a bid to help curb the spread of the novel coronavirus, industries across Canada are feeling the impact and real estate is not immune.
Recently, the Toronto Regional Real Estate Board (TRREB) announced that GTA realtors reported 8,012 home sales in March 2020—up by 12.3 per cent compared to 7,132 sales reported in March 2019.
But while March boasted strong sales overall, TRREB says there was a clear break in activity between the pre-COVID-19 and post-COVID-19 periods, with the post-COVID-19 period beginning Sunday, March 15.
Not unexpectedly, strong sales were reported in the first two weeks of the month.
TRREB says realtors reported 4,643 sales in the pre-COVID-19 period. There were just 3,369 sales reported during the post-COVID-period, which represents a 15.9 per cent drop compared to the same period in March 2019.
"The overall sales result for March was strong relative to last year, but the impact of COVID-19 was certainly evident in the number of sales reported in the second half of March. Uncertainty surrounding the outbreak's impact on the broader economy and the onset of the necessary social distancing measures resulted in the decline in sales since March 15," said Michael Collins, TRREB president, in a statement.
"Sales figures for April will give us a better sense as to the trajectory of the market while all levels of government take the required action to contain the spread of COVID-19."
TRREB says that for March as a whole, new listings were up by three per cent year-over-year to 14,424. However, new listings dropped on a year-over-year basis during the second half of the month by 18.4 per cent.
TRREB says the average selling price for March 2020 as a whole was $902,680 - up 14.5 per cent compared to March 2019. The average selling price for sales reported between March 15 and March 31, was $862,563—down from the first half of March 2020, but still up by 10.5 per cent compared to the same period last year.
In Mississauga, the average price of a detached home reached $1,273,225 in March. Semi-detached homes cost $840,726, townhouses cost $807,193 and condos cost $547,336.
Real estate brokerage and website Zoocasa also says that sales and price gains and March occurred before the pandemic became real to sellers and buyers.
"Health and economic measures from all three levels of government to combat COVID-19 including social distancing protocols, economic relief packages, two emergency Bank of Canada rate cuts, and a number of initiatives targeting homeowners and renters had a visible impact on the spring market," Zoocasa says.
"Although sales were up 4 per cent year-over-year across the Peel Region and 6 per cent year-over-year in the Halton Region, these gains can largely be attributed to market activity in the first half of the month, before a number of these measures came into effect."
Zoocasa calculated that in the two weeks following the state of emergency declaration by the provincial government on March 17, the regional housing market was plunged squarely into buyers' market territory—just a month after the market was bracing for busy sellers' market conditions this spring.
Zoocasa says there were 1,355 new listings in Mississauga in March, with 756 homes changing hands. That's up 6 per cent from the same period last year and 10 per cent since February.
According to Zoocasa, average prices in the city grew 16 per cent year-over-year but dropped by 3 per cent from February to $860,158. Prices for condo apartments and semi-detached homes have remained flat since February (but grew 19 per cent and 16 per cent year-over-year respectively), while condo townhouses saw a modest average price decline of 2 per cent month-over-month (but a larger growth of 14 per cent year-over-year).
Detached home average prices grew by 3 per cent since February, and 18 per cent annually to reach $1,273,225.
TRREB says people still value homeownership, but it remains to be seen how the market will look as the crisis continues.
"Despite sales and listings trending lower in the second half of March, demand for ownership housing remained strong enough relative to listings to see the average selling price remain above last year's levels, including during the last few days of the month," said Jason Mercer, TRREB's chief market analyst, in a statement.
"As we move through April, we will have a clearer view on how social distancing measures and broader economic conditions will influence sales and ultimately the pace of price growth."
As for how the market will look going forward, TRREB says that if COVID-19 infections peak in the spring and social distancing measures are relaxed in the mid-to-late summer, we could see an increase in the demand for housing throughout the fall and into the winter.
News of employees returning to work from furlough coupled with the continuation of extremely low mortgage rates could fuel this recovery, TRREB suggests.
"As noted in the March figures, demand for ownership housing remained strong enough relative to listings in the second half of March to see average selling prices remain above last year's levels," TRREB says.
"As we move through the spring, it is possible that we may see a moderation in price growth if market conditions soften due to a combination of slower sales and an uptick in listings. However, a resumption of tighter market conditions and an improving pace of price growth will likely occur as the market recovers in the fall of 2020 and winter of 2021."
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