It seemed like just a few months ago Toronto real estate was roaring, with year-over-year price increases and an active spring home-buying market. Yet, as the seasons change, the course of our lives follows suit due to the COVID-19 pandemic. From self-quarantining to social distancing measures, there is a lot of uncertainty at the moment.

Many popular summer events in the city have been cancelled, and experts predict that the coronavirus measures will last in Canada until at least July. This is expected until the number of cases is reduced and the pandemic is deemed “under control.”

If we look forward to the next few months, we can speculate about how the Toronto housing market will be affected and if real estate prices in this city will significantly drop come summertime.

Pumping the brakes on the market for now

Current market activity may appear to have slowed. Early April saw average home prices in Toronto decrease by 1.5% and some economists predict that by July, home prices could fall by 5 per cent.

Yet, we cannot be sure that this trend will continue into the summer and that prices will necessarily drop further. The Toronto Regional Real Estate Board (TRREB) notes that the pause on activity will lead to more demand once measures loosen. As a result of banned open houses, homebuyers have resorted to creative ways of viewing listings and engaging with the market, leveraging technology to facilitate the home-buying process while mitigating the impact of coronavirus on real estate activity in Toronto.

Social distancing will likely continue for at least a portion of the summer. Yet, we expect buyers who have been waiting patiently to continue their home search will quickly re-enter the market when we return to some normalcy. Meanwhile, some sellers will take a wait-and-see approach and may not need to reduce their home sale prices or make concessions.

Yet, when the market recovers, buyers are likely to find the same shortage of listings and inventory that existed before the coronavirus outbreak, further contributing to increased demand and high prices in the city.

Pace of the economy and employment

The state of the economy and unemployment rates will play a role in the amount of financial power people have to make a home purchase. The government has put a number of COVID-19 relief measures in place to help Canadians during this time. The extra financial assistance will certainly help Canadians, and it may even encourage real estate activity for those who need to buy or sell at this time.

Continue to read on: Re/Max.ca