Toronto Real Estate Market Update May 2020
Monday, June 8, 2020
Toronto Regional Real Estate Board released important monthly real estate update for the month of May 2020 pertinent to those looking to invest in real estate through buying or selling a house in GTA.
As per TRREB MLS® System Sales data, Greater Toronto Area home sales were down by a massive 53.7% over May 2019 as a result of covid-19 impact and a comparatively slow real estate market.
On the other hand, comparing on a monthly basis, GTA Home sales were up by 55.2 per cent in May compared to April 2020 which indicates a positive sign of activity for the Toronto real estate market.
Again, the number of new house listings in May 2020 was down compared to May 2019 by a whooping 53.1 per cent while number of new listings was up by 47.5 per cent compared to April 2020.
“While the public health and economic concerns surrounding COVID-19 continue to impact the housing market, the May sales result represented a marked improvement over April. Providing we continue to see a gradual re-opening of the economy, it is very possible that home sales will continue to improve in the coming months,” said Mr. Collins, president of the real estate board.
Coming to changes in house prices, contrary to hopes of several home buyers looking to buy a house in Toronto or GTA, average selling price of houses in GTA continue to escalate and was up by 9.4% compared to May 2019. On a monthly comparison, the selling price rose by 3% at $863,599 over April 2020. The average selling price includes price of all home types sold in the past month in GTA.
As home sales and new house for sale in GTA listings continue to spiral downwards, real estate market conditions remain stringent. However, as more of the economy gradually opens up, home buyers and sellers who have been waiting will likely enter the market and revitalize it.
On a separate news, Canada’s mortgage and housing corporation has updated its mortgage rules which will take effect from July 1, 2020. The changes include raising of credit score from 600 to 680, maximum gross debt service (GDS) ratio, share of income for housing costs reduced from 39% to 35%, and total debt service reduced from 44% to 42%. Experts say this will cut home buying power by almost 12%. All homebuyers having lower than 20% down payment must have mortgage insurance. About 35% of Canadian banks’ mortgages are insured, with CMHC. However, reports suggest that it is probable that private insurers will not keep up with CMHC’s lower debt ratios but might be more discerning in the loan approval process.