Toronto

Toronto home sales in May up from April, but economists temper their optimism

Home sales are showing signs of improvement in the Toronto real estate market, but economists say it's far too early to feel optimistic about the trajectory of a recovery from the devastating effects of the COVID-19 pandemic.

There were 4,606 sales in the GTA in May, down 53.7% compared with a year ago

Toronto’s real estate market saw a bit of a resurgence in May after a dismal April due to COVID-19. A report from the Toronto Real Estate Board suggests that homes are not only still selling but they are also commanding top dollar. (CBC)

Home sales are showing signs of improvement in the Toronto real estate market, but economists say it's far too early to feel optimistic about the trajectory of a recovery from the devastating effects of the COVID-19 pandemic.

"The hole is very, very deep to dig ourselves out of," said Robert Hogue, senior economist at Royal Bank.

Activity in the region improved in May compared with April, according to figures the Toronto Regional Real Estate Board released Wednesday. But it remained less than half of what TREB saw a year ago.

There were 4,606 sales in the Greater Toronto Area through the board's MLS system in May, it said. That's down 53.7 per cent compared with a year earlier.

However, sales in May were up 55.2 per cent compared with April.

The number of new listings also rose compared to the previous month, but fell year-over-year.

New listings totalled 9,104 — down 53.1 per cent compared with May 2019, but up 47.5 per cent from this past April.

The average selling price rose three per cent from May 2019 to $863,599.

Those figures are enough to be optimistic about, considering the circumstances, said David Fleming, a broker at Bosley Real Estate David Fleming Group Inc.

"It's completely in line with what I expected and I think ... you'll see that continue into June," he said.

May saw substantial pick-up, he noted.

"So while sales figures are [still] down, do people care how many units are selling or do they care what the prices are?" he said.

The average selling price rose three per cent from May 2019 to $863,599. (CBC)

The novel coronavirus knocked the wind out of what was expected to be among the strongest spring seasons in home-sales history, said Sherry Cooper, chief economist at Dominion Lending Centres.

But with the COVID-19 shutdowns, the "period of adjustment" remains uncertain, especially when considering low interest rates against a surge in unemployment, she said.

"They're opposing forces," she said of those two factors.

"I don't think we're going to see gangbuster home sales, but I do think they're certainly going to come off the bottom."

'The hope is back, the deals are being done'

Real estate agent Andrea Feldman, of the Christine Cowern Real Estate Team, said the fact that homes in Toronto are starting to move again, after the market came to a near standstill in April, is surprising.

"The hope is back, the deals are being done, so you can breathe a little bit," she said.

"I think we thought it would be a longer road, so I do think that we are surprised to see things coming back this quickly. It just shows the resilience of the Toronto real estate market."

She said there will be a prolonged spring market and possibly a busier summer.

Real estate broker Joe Machado, of HomeLife Regional Realty, said deal hunters may have been hoping to take advantage of a down market, but there was enough demand to keep prices up.

"I think there was a certain percentage of people that had disposable income and weren't really concerned about whether they would lose their job or not and were looking for deals, absolutely," he said.

"The buyers are back out and the sellers are getting their asking prices, in some cases, more."

Machado said other factors, such as low interest rates, may be drawing people into the market.

Other factors, such as low interest rates, may be drawing people into the Toronto housing market. (CBC)

With files from Greg Ross

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