Pedestrians wait to board their bus next to a house listed for sale in Toronto’s west end on July 4.Sammy Kogan/The Globe and Mail
The Toronto-area real-estate market tipped more decisively into buyers’ territory in June, but that has not dissuaded some sellers from launching their property in July in order to get a jump on the fall market.
“It has been busy in terms of people who want to list their places,” says Davelle Morrison, broker with Bosley Real Estate Ltd.
She is hearing from house and condo owners who are contemplating listing now because of typical life transitions. In many cases, they figure they will have an even greater number of listings to compete with if they hold off.
Often, Ms. Morrison agrees with them.
In traditional years, the fall market kicks off soon after Labour Day as potential buyers return from cottages and vacations.
This year, Ms. Morrison is urging some clients who are considering a sale to list before the fall brings a rush of new supply.
“It depends on the neighbourhood and the type of home.”
In the upper echelons of the market, some agents in neighbourhoods awash in listings are advising sellers against placing a “for sale” sign on the lawn.
Ms. Morrison says that strategy may make sense in price ranges above $5-million because buyers with deep pockets often spend a stretch of the summer in Muskoka or Europe, for example.
“I’m talking about mere mortal transactions,” she says with a laugh. “For people paying under $1-million for a condo, they’re here for the summer.”
Sales in the Greater Toronto Area showed a slight improvement last month with a 4.2 per cent increase from May on a seasonally adjusted basis, according to the latest data from the Toronto Regional Real Estate Board.
That small upturn is the first in five months, points out National Bank of Canada economist Daren King, and comes in the same month the Bank of Canada cut its benchmark interest rate from 5 per cent to 4.75 per cent.
But new listings outpaced the sales gain with a 9.3 per cent jump, seasonally adjusted, in June from May, added Mr. King in a note to clients. That’s the third monthly increase in a row and the biggest advance since September.
Active listings increased 7.4 per cent in the month, according to his estimates, marking their highest level since December, 2017, when the stress test on uninsured mortgages came into effect.
The active-listings-to-sales ratio shows that the market loosened further in June. Conditions are much looser than the historical average, he says, which suggests a market that favours buyers.
Delving farther into the numbers, Mr. King notes that the story of the Toronto-area market varies by segment.
In the condo tranche, he estimates that sales fell 17.6 per cent in June from May. Active listings slipped 1.6 per cent last month, despite an increase of 3.5 per cent for new listings, as a record number of sellers cancelled their listings in June, according to his data crunching.
“The condo market is quite dead,” agrees Ms. Morrison.
She listed a one-bedroom condo apartment at the foot of Yonge Street and has booked very few showings so far.
Many of the one-bedrooms downtown were purchased by investors, she points out, and she expects even more listings to come on the market as those owners bail in the face of high carrying costs.
But the dynamics in various slices of the condo market also differ: Ms. Morrison points to a two-bedroom condo she is planning to list near Bayview Avenue and Eglinton Avenue East. The tenants are planning to move out, and Ms. Morrison is looking at ways to speed up preparations after that.
“I’m asking, ‘Is there anything we can do to get out before the fall?’ I am concerned about the inventory.”
Still, for units larger than 1,000 square feet in midtown, buyers are still circulating.
Ms. Morrison worked with one buyer who recently looked at a three-bedroom condo apartment with 1,200 square feet of living space and an asking price of $930,000 in Don Mills.
“Sure enough, the next day there was an offer,” says Ms. Morrison. “We had to compete in order to get this.”
The buyer paid $935,000 for the unit at 205 The Donway to secure the deal.
Ms. Morrison then listed the client’s existing two-bedroom condo in a building next to the Shops at Don Mills with an asking price of $878,000.
The unit was listed on a Wednesday and sold conditionally on Thursday night to buyers who had been waiting for a unit with a desirable floor plan to come up for sale in the building.
And while buyers leap at some properties, they overlook others.
Soon after Canada Day, Ms. Morrison listed a three-bedroom detached house for sale near Eglinton Avenue West and Caledonia Road.
She set an attention-grabbing asking price of $898,000 for the renovated home and an offer date one week later. But as the deadline approached, she was uneasy about how many buyers might step up.
“We haven’t seen as many showings as I would have liked,” says Ms. Morrison, who believes that many buyers are waiting to see if the Bank of Canada lowers the policy rate again at the next scheduled meeting on July 24.
Meanwhile, closings remain tricky as lenders apply more stringent standards to financing, warns Mark Weisleder, a senior partner with RealEstateLawyers.ca LLP.
The big banks and other lenders sometimes require additional last-minute paperwork, which means buyers need extensions beyond the agreed-upon closing date.
“It’s not easy right now in the city closing deals,” he says.
Mr. Weisleder advises people buying one property and selling another not to line up the closings of the two transactions for the same day, because too many possible glitches can pop up. People then encounter all sorts of problems with movers, bridge financing and other headaches, he says.
On the last Friday in June, Mr. Weisleder received a call from a lawyer requesting a one-day extension for the buyers who were purchasing a house from Mr. Weisleder’s clients. That in turn meant his clients couldn’t close on their new house.
Because of the Canada Day holiday, the lenders didn’t open their doors again until the following Tuesday.
In total, the chain reaction meant four deals couldn’t close because one party didn’t do their proper homework.
“That’s what lawyers call a train wreck,” says Mr. Weisleder.
The firms then worked together to find solutions, including figuring out who would pay for any added costs.
At 5 p.m. on July 4, all the deals had finally closed.