(Toronto) When Shannon Tebb put her downtown Toronto loft up for sale in mid-June, she did everything she could to make the property attractive to buyers. She hired developers, repainted the walls, washed the windows, listed the place below market value, and advertised on all social media.
Posted at 2:00 p.m.
But in July, she took the property off the market — and not because she had found a seller.
Mme Tebb canceled his listing because the market has changed so much that the bidding wars and frantic sales pace seen earlier this year have dissipated.
Last month, the Canadian Real Estate Association (CREA) reported June home sales were 48,176, down 24% from 63,280 transactions in the same month last month. last year. On a seasonally adjusted basis, sales were down nearly 6% from May.
The decline was attributed to interest rates, which are rising at a faster rate than some expected and are driving up the cost of mortgages, and inflation, which recently hit a 39-year high on an annual basis.
These two factors have caused properties to remain on the market for weeks or months, forcing sellers to make tough decisions.
As she did not arouse much interest with her announcement, Mme Tebb ended it and instead turned the loft into a rental property.
“Everyone was saying ‘no one is looking for or visiting anything anymore’, so we lowered the price […] and we had a few visits; then, nothing, no offer. »
The real estate firm Strata has seen an increase in the number of people who, like Mme Tebb, took their property off the market.
In January, while the market was still very active, 380 condominium listings were canceled in the Greater Toronto Area, while they were counted at 2,822 in June, an increase of 643%, according to Strata.
“We see a lot of sellers who just don’t get the price they want and they’re like, ‘we’ll wait’ or ‘I don’t want to sell for $50,000 less than what my neighbor got. got it a month ago because it’s a lot of money,” said Anna Wong, a representative at Strata.
“We’ve been in a seller’s market for a while […] and right now, sellers are struggling to adapt. »
Revitalization of the rental market
CREA found that the national average home price in June was down 2% from the same month last year, to $665,849. On a seasonally adjusted basis, it was down 4% from May.
“We are seeing some sellers staying in the market. They list their properties trying to get yesterday’s prices and they stay for long periods of time,” observed Dan Campanella, a broker with Keller Williams Advantage Realty, who represented Ms.me Tebb.
Some withdraw their ads and continue to live in their property while waiting for a better time to sell, but others who cannot obtain the desired amount take the opportunity to turn to the booming rental market.
Research firm Urbanation recently reported that lower vacancy rates in Toronto in the second quarter pushed the average rent to $2,533, with a record $3.57 per square foot, up 5.9% in the second trimester compared to the first.
Rentals.ca also found that average rents in Canada increased by 9.5% over the previous year. Vancouver rents jumped 24.7% from a year ago and Calgary rents increased 26.1%.
Mr. Campanella describes the rental market as “on fire”, largely due to potential first-time buyers.
“When their buying power drops dramatically, they can’t buy their first condo, but they still have to move downtown, which means there are more and more people looking for a rental,” he explained.
“Prices are skyrocketing”
Anne Hermary, Vancouver real estate consultant for Royal LePage Westside, has also seen a resurgence in the rental market.
While she hasn’t had to deal with a listing pull yet, she suspects some sellers won’t get into the market due to current conditions.
“Based on my client base who have properties, I feel they don’t necessarily need to sell or move, there’s no motivating factor at the moment,” she said. underline.
“They may have thought about buying (a smaller accommodation). They are waiting to see what will happen. »
Buyers are also waiting, added Mme Hermary.
“Some are completely out of the picture now, because they can’t get funding approval for what they hope to buy, but others are just waiting because they feel the market will continue to drive prices down. . »