TORONTO — More buyers are wading into the Greater Toronto Area housing market after putting the hunt for a home on hold at the start of the COVID-19 pandemic, but there aren't enough properties available to meet the demand.
"The new listings are coming out, but they are not coming out in abundance," said David Fleming, a Toronto-based realtor.
"If you want to buy a two-bed, three-bath, semi-detached with one-car parking in (the Leslieville neighbourhood), you're going to get, best-case scenario, two per week and then the problem is each of those houses is going to have 80 prospective buyers through it."
The Toronto Regional Real Estate Board said Tuesday that 8,701 homes were sold in June, down 1.4 per cent compared with the same month last year. On a seasonally adjusted basis, those sales were up 84 per cent compared with May.
However, active listings were down at the end of June by 28.8 per cent compared to the prior year.
There were just over 16,150 new listings, a 2.1 per cent increase from last year, according to TREBB, which also said that growth in new listings will need to outstrip growth in sales for a number of months before active listings approach last year’s levels.
The demand the market is experiencing comes after a sluggish few months that saw most Canadians transition to work from home and postpone any plans they had to buy or sell properties.
Some realtors moved ahead with sales, hosting virtual showings and forcing prospective buyers to don a mask and gloves to check out a property, but the market still took a hit.
"I found myself without ... a lot to do in the last week of March and first week of April," said Fleming. "No buyers were buying. No one wanted to go see properties."
In recent weeks, that has all changed. Fleming is seeing people return to the market so quickly that a pricing rebound is happening much earlier than he anticipated.
The average selling price in June was $930,869, up 11.9 per cent compared with June 2019, said TREBB.
"There is so much pent-up demand that exists from carryover buyers from last year, early winter buyers from this year and then would-be COVID buyers that when the market started up again in May and June, it just absolutely exploded," he said. "It was the perfect storm."
Fleming now think it will be the busiest July on record.
Lisa Patel, TRREB's president, has noticed the pent-up demand too and is optimistic about where the market is headed.
"We are still in the early days of recovery, but barring any setbacks, we should continue to see stronger market conditions in the second half of 2020 as households look to satisfy their ownership housing needs," she said in a statement.
Bank of Montreal economist Priscilla Thiagamoorthy took the TRREB numbers as a sign that the Toronto housing market is roaring back to life.
"Low interest rates and thin inventories combined with still-strong demand should lead to higher prices as COVID-related restrictions continue to ease," she said in an note sent to investors.
But there's plenty to watch out for as the market stages a rebound, cautioned TRREB chief executive John DiMichele.
Policy makers should proceed cautiously with any demand-side stimulus, he said in a statement.
"The persistent lack of listing inventory in the GTA understandably took a back seat to COVID-related issues in the short term, but supply should once again be top-of-mind once the recovery takes hold, in order to ensure long-term affordability in the GTA."
This report by The Canadian Press was first published July 7, 2020.