Canadian home sales drop to 36-year record lows due to the COVID-19 pandemic

In a recent report from the Canadian Real Estate Association (CREA), Canada’s real estate market for residential homes has plummeted to record lows in the month of April.

Sales have dropped by 56 percent, making the drop the lowest in history for the month of April. This marks the worst sales rate for the month of April since 1984.

The drops were first felt in the second half of March. In the first half of the month, house sales were strong before the announcement of a pandemic and the eventual lockdowns around the country. By the end of March, house sales were 15 percent down in comparison to February’s sales.

Typically, house sales begin to increase during the spring and summer seasons as the cold weather turns people off to the idea of buying a home. 

Those increased seasonal sales, as well as the housing trends that follow, have all been halted due to the COVID-19 pandemic.

With social distancing in effect and health concerns being at an all-time high as of late, house viewings have been put on an indefinite hold.

“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 the CREA’s chief economist Shaun Cathcart.

Surprisingly, although there is a decrease in real estate activities, inventory levels jumped up to 9.2 months when compared to 4.3 months in March, which has been noted to be due to older listings remaining active while sales have fallen.

According to statistics, major real estate cities like Toronto, Vancouver, and Ottawa saw major falls in home buying and selling activities.

Real estate activity in April

  • Greater Toronto Area – down 66.2 percent
  • Vancouver – down 57.9 percent
  • Ottawa – down 51.5 percent
  • Winnipeg – down 42 percent

Despite the activity of real estate going down, prices for these houses remain around the same as usual for spring house sales prices.

The national average home price of $488,000 per home was sold in April, meaning the overall price had only gone down by 1.3 percent in comparison to last year’s prices.

Cause for concern?

The statistics for price averages are to be taken with a grain of salt however, as the decrease in sales for major markets like Toronto and Vancouver has greatly affected the sale percentage according to economists.

According to TD Bank economist Brian DePratto, without the two major cities getting the amount of sales expected, the average figure looks worse than it is.

“Weaker activity at the higher end of the market took on an even bigger role in shaping average prices given the unprecedented low level of transactions… With activity shrinking so dramatically and likely to stay depressed for several months, average prices will likely be distorted.”

The real issue is for homeowners wanting to sell during this time, as the uncertainty with how long the pandemic will last is going to influence the selling price for their property.

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