Two months ago, Toronto real estate agents and mortgage brokers were expecting a red-hot market, predicting that home sales and prices would surge back to 2017 heights.

Then the COVID-19 pandemic hit, leading to closures, layoffs and an economic downturn – and making two months feel more like two years ago.

“It’s like throwing sand on the fire,” says Meray Mansour, a Toronto-based realtor with Re/Max Hallmark Realty. Mansour spoke to NOW about the uncertain real estate market ahead alongside Odeen Eccleston, a broker with WE Realty and expert on HGTV Canada's Hot Market, and Stephen Parks, a mortgage broker with RedPath Financial.

All three agree that the Toronto housing market is at a precipice. The gravity of the COVID-19 pandemic is sinking in as new measures are introduced and insecurity is taking hold among buyers, sellers and the industry as a whole. Realtors are bracing for a worst-case scenario while hoping for the best.

“We just don’t know,” says Mansour. “This is not something we’ve experienced in our lifetime.”

“My default ratio over my career is next to nothing,” says Parks about the mortgages he gets approved. “All bets are off now.”

Banks are allowing some clients to defer mortgage payments so that they don’t default. Even new mortgage deals are going through despite the minor hardships and temporary layoffs borrowers might be facing during COVID-19. But that’s only if the borrowers bouncing back seems likely.

Small business owners who rely on summertime business or perhaps run a travel agency won’t be so lucky, says Parks. And depending on how long the quarantine lasts, more and more people will have to figure out how they’re going to afford their homes.

“Most people don’t have six months saved up,” Parks adds. “We’re not talking about a rainy day here. You can dip into your piggy bank for your rainy day money. We’re talking about a while.”

This could all lead to more houses being listed, while buyers wither away because they also feel insecure about their finances. 

“Now you've got more supply and less demand,” says Mansour. “That’s where the prices will go down more.”

Our experts point out that, up until this point, the market has yet to suffer consequences such as price drops and stagnant properties from the pandemic. While sales began slowing mid-March, Toronto home prices have been largely unaffected.

According to the Toronto Regional Real Estate Board, an early surge in March gave the GTA 8,012 real estate transactions, a 12.3 per cent boost over the same period in 2019. The average selling price is also up 14.5 per cent from the previous year at $902,680. Eccleston points out that while these figures are an improvement from last year’s low point, they are certainly not what realtors expected in 2020.

“You would think they’re taking a huge heater,” says Parks. “They’re not. I’m seeing prices in certain areas are still really strong. Roncy and the Junction area are still crazy.”

“I sold a property probably about $30,000 less than what I would have sold it for at the time we last spoke [in February],” says Mansour. “In the grand scheme of things, it’s not a huge difference but it is a difference. And [the pricing] also depends on location. I work in predominantly urban neighbourhoods. They tend to keep their value. There’s not as much land and inventory.”

“It's not like people will get insane deals,” Eccleston adds. “That’s not happening just yet. Things are on pause. A couple of my sellers are nervous that things are going to get worse, so they’re taking what they can get. But it’s still by no means an incredible discount. As opposed to 20 offers, it might be two offers, which is a little bit more of a healthy market – a more levelled market.

“But I can see it getting worse before it gets back to normal.”