In June, condo listings in the GTA plunged to a record-setting low.
According to a report by Strata, the number of terminated listings rose by a staggering 643% from 380 in January to 2,822 in June. Realtors with Strata said this development in the condo market reflects the overall housing market slowdown.
“Many sellers are still operating under the impression that this is a seller’s market, so they are listing too high and not seeing any action,” wrote Alex Hood, a realtor at Strata.ca, in the report. “At the same time, rising inflation and interest rates are making buyers feel uncertain about the trajectory of the market, which is causing them to be more conservative with their bids.”
Last month, the Toronto Regional Real Estate Board (TRREB) reported that home sales were down by 41% year over year, with the average selling price trending lower on monthly basis. New listings remained relatively unchanged from last year, and overall, the overheated seller's market conditions we saw throughout the pandemic have tempered.
Although the market has been cooling off for some time, Grace Chan, a Toronto real estate agent with Chestnut Park Real Estate, says that many of the listing prices she's been seeing since April haven't been in line with current market conditions.
"I remember having conversations with my clients, 'things are changing, do we underprice or over?' What we did was price listings slightly below market price, and then we got slightly above asking price during that shift," she says. "But I noticed a lot of agents didn't catch on. They priced above-market and one of two things happened: no offers came or they didn't get the price that they wanted, so they would terminate."
In some cases, terminated listings are ending up back on the market just a day or two later -- sometimes with fresh staging, new photography, or higher agent commissions. This is unusual behaviour. Strata notes in their report that, ordinarily, it can be years before a terminated listing reappears on the market.
In other cases, would-be sellers are making the savvy decision to rent.
"Rental markets are completely bonkers. People are coming back into Toronto -- not only students who are going back to U of T, for instance, and all the other universities and colleges, but also people relocating back into the city to work," says Chan. "Rentals have become the new buying, where you've got 10 offers on everything."
According to a recent report, the average monthly rent in the GTA hit $2,403 last month, marking a 19% increase since last year and a 3% increase since last month. The month-over-month increase is the second-highest in over three and a half years.
"If I were somebody that didn't need to sell and I had a vacant property, then I'd sooner rent," says Chan. "You have your pick of the litter. International students are paying a year upfront, [and] very well-qualified people coming from the United States or wherever [are] making very good money. That's a really good sign that this is a healthy city and very connected and growing."
Chan adds that condo owners that are intent on selling don't need to panic, they just need to price realistically, bearing in mind that if you're selling your condo with the intent to buy elsewhere, your buying power will be higher as home prices trend downwards.
And when in doubt, there's always the option to list your condo for sale and for rent.
"That would also go to the number of terminated listings," says Chan. "When [a property] rents, then you would terminate the sales listing."