As we navigate through these uncertain times, we are wondering what condo life will look like in the future. To illustrate how quickly the condo market changed as a result of COVID-19, resale activity was up 25% year-over-year during the first half of March 2020 and fell 21% year-over-year in the second half of the month, with even steeper annual declines of over 70% reported for April. However, the GTA market was exceptionally tight leading into the COVID-19 period, creating spillover demand that has enabled the limited number of units on the market to continue transacting. In fact, the average sale price-to-list-price ratio has remained near 100% through April, and the average days on market was unchanged at 18 days.
As sales have declined by a much faster pace than new listings, resale condo prices have experienced some reduction. Preliminary resale data for April reported a 2.2% annual decline in average resale prices for condos, and most of the decline has occurred for higher-priced units. Overall, industry experts feel that resale values might be down by 5% at the end of 2020 compared to the end of 2019. Again this is all speculation as no one has a crystal ball.
Toronto rents were also down on all fronts. In April, the average one-bedroom rent in Toronto dropped 2.2% month-over-month to $2,200 and two-bedroom rent fell 4.1% month-over-month to $2,830. The decline in rental transactions can clearly be related to the impact of the protective measures and economic uncertainty stemming from the onset of COVID-19 pandemic, with renters less willing or able to take on a new lease at current rents, as well as the closing of Canadian borders and the challenges with showing units and planning for a move in the current environment.
Of importance, rental supply did not experience the same degree of decline as leases, with new listings decreasing by a more modest 7% in the post-COVID-19 period from a year earlier. The relatively more stable level of new listings may be attributed to a rise in condo completions in the first quarter, tenants unable to pay their rent providing notice to vacate, and some short-term Airbnb units becoming available in the long-term market.
