COVID-19 Effects on Real Estate in Oakville
Like most other industries, real estate markets around the world are facing many new challenges and uncertainties with the spread of COVID-19. As we closely monitor our local market, here is what we are seeing:
A Decrease in the Volume of Sales
In January, February and the early part of March, we saw record-breaking numbers in sales activity and dramatic increases in sale prices. The market was hot. With the high level of demand and limited supply, we saw a return to multiple offer situations and many homes sold for over asking price. With the measures taken to stop the spread of COVID-19, the number of transactions has certainly slowed down since the beginning of the month. Buyers and sellers who are not in a rush to buy or sell have opted to pull out of the market, bringing about significant decreases in the volume of sales towards the end of March and early April.
Average Sale Prices Have Increased This Year
On a positive note, while the number of sales has certainly dropped since the beginning of March, transactions are still taking place and market fundamentals remain strong within the GTA. While average sales prices have seen a moderate decrease from February’s high, year over year we have seen an increase of almost 8.0% in Oakville. Despite the limitations to in-person showings and the complete stop on open houses, homes are continuing to sell at or near their asking prices. We experienced a strong seller’s market in January through March, and while the market has moved more towards balance, we’re still in a seller’s market. Home prices are still significantly higher than last year, and we anticipate a continued upward pressure on prices in the months to come as demand continues to outpace supply. Of course, the marketplace is continuously evolving and adjusting to current events and the changing economic environment. We’re keeping a close watch.
The Real Estate Market in the GTA will Bounce Back
The GTA housing market has experienced slowdowns in the past such as during the 2008 mortgage crisis and the 2017/2018 slowdown caused by the government’s implementation of the foreign buyer’s tax along with the new stringent mortgage qualification rules. However, as a world class metropolitan area, such slowdowns are temporary as the GTA remains an attractive market both nationally and internationally and will continue to experience overall growth over the long run. Despite these recent measures, toward the end of 2019 pent-up demand for houses in the GTA put an increased upward pressure on home prices once again. The GTA is experiencing one of the highest rates of population growth in North America. Demand for housing is high. The uncertainty surrounding COVID-19 may temporarily dampen market activity, but we can expect the housing market to bounce back quickly.
Selling or Buying at this Time
It’s absolutely possible to sell your home or buy a home during this time. Realtors across Canada have adjusted their practices to prioritize safety and minimize spread of the virus to clients and the public. With a strong focus on virtual technologies, we are continuing to serve our clients in creative and effective ways.