Canadian home sales and listings have fallen sharply in March due to the COVID-19 pandemic.
On Wednesday, the Canadian Real Estate Association (CREA) released statistics showing that national home sales decreased by 14.3% on a month-to-month basis in March 2020 and newly listed properties fell by 12.5%.
However, activity in the housing market was up by 7.8% from the same month last year, although that was a considerable slowdown compared to the gain of close to 30% recorded in February.
The actual national average, which CREA defines as not “seasonally adjusted” price, for homes sold in March 2020 was just over $540,000, up 12.5% from the same month the previous year.
It’s important to note that the national average price is influenced by sales in the Greater Vancouver and Toronto areas, two of Canada’s most active and expensive housing markets.
Excluding these two markets from calculations cuts more than $130,000 from the national average price, making it closer to $410,000.
According to CREA, if you factor in the seasonal adjustments, which in this case refers to the “economic turmoil” and physical distancing rules caused by the pandemic, both buyers and sellers “retreated to the sidelines” over the second half of March.
Transactions were down in the vast majority of local markets, with the Greater Toronto Area (GTA) declining 20.8%, Montreal with 13.3%, Greater Vancouver with 2.9%, Calgary with 26.3%, Edmonton with 13.2%, Winnipeg with 7.3%, Hamilton–Burlington with 24.9%, and Ottawa with 7.9%.
“March 2020 will be remembered around the planet for a long time. Canadian home sales and listings were increasing heading into what was expected to be a busy spring for Canadian Realtors,” Jason Stephen, president of CREA said.
“After Friday the 13th, everything went sideways. Realtors are complying with government directives and advice, all the while adopting virtual technologies allowing them to continue showing properties to clients already in the market, and completing all necessary documents. They remain your best source for information and guidance when negotiating the sale or purchase of a home in these unprecedented times.”
While the pandemic has changed the housing market, overall, the balance between sales and new listings has stayed very similar to the pre-coronavirus climate.
Around two-thirds of all local markets have a balance of house sales and new listings, with the remainder in favour to sellers.
In order to help Canadians with the current economic situation the Bank of Canada (BoC) confirmed they are maintaining their lowered interest rate of 0.25%, which they first announced on March 27.
This means that people who are borrowing from the bank will generally get credit at slightly lower rates than before, giving them more money in their pockets to handle expenses like mortgages or home purchases.
The bank drastically lowered its target for the overnight rate by 150 basis points over the last three weeks, to keep the interest rate at 0.25% — the lowest that rates can be set.
“The necessary efforts to contain the COVID-19 pandemic have caused a sudden and deep contraction in economic activity and employment worldwide,” BoC said in a statement.
The level of economic activity was down one to 3% in the first quarter of 2020, and will be 15 to 30% lower in the second quarter, than in fourth-quarter of 2019.
By lowering the interest rates, BoC is allowing for more credit in the economy for businesses and people that need it, which will help lay the groundwork for the economy’s return to normalcy.