After the Bank of Canada lowered its key interest rate in early June, many expected it would boost buyer activity in the Toronto real estate market. However, it seems that sellers are the ones taking action.
Robin Pope, a broker at Pope Real Estate, notes that the sluggish spring market has slowed even further in June. Despite hopes that the rate cut would have an impact, it ultimately did not make a difference according to Mr. Pope.
Even with another potential rate cut, Mr. Pope questions how much it will really influence buyers when interest rates are already high. He shares an example of a Toronto row house listed at $1.95 million that received no inquiries or showings after being on the market for 10 days.
Real estate agent Anna Wong of Strata.ca has observed a surge in new listings since the rate cut announcement, leading to an increase in inventory in the core 416 area code. However, many buyers are still hesitant and waiting to see if this trend will continue.
Despite the increase in listings, Ms. Wong advises sellers to hold off if they are not in a rush to sell. She notes that the condo market is particularly affected, with units sitting on the market in the downtown core.
Economist Daren King of National Bank of Canada believes that factors like demographic growth and potential future rate cuts could support transactions. However, he remains cautious about a housing market rebound due to uncertainties surrounding the labour market and housing affordability.
In the condo market, buyers are wary of purchasing now and potentially seeing prices drop further. Mr. Pope highlights the pressure from new condo supply entering the market, particularly in a market that is underperforming.
Overall, sellers in the current market need to be flexible and willing to negotiate. Mr. Pope warns against questionable tactics, such as drastic price changes, that could turn off potential buyers. In a market where every hour matters, sellers must be strategic in their approach to avoid losing out on potential deals.