The bustling spring buying spree in Canada’s real estate market appears to have tapered off, with sellers still holding the upper hand in many cities. Robert Hogue, assistant chief economist at Royal Bank of Canada, highlights that the slower pace of sales growth signals a shift in the Canadian housing market’s recovery. Although national sales experienced a slight uptick of 1.5% in June compared to May, Ontario witnessed a 1.3% dip during the same period.
Hogue attributes the waning enthusiasm among buyers to two key factors: the Bank of Canada’s resumption of its rate hike campaign and unexpectedly robust price gains in certain markets during the spring. New listings in Canada grew faster than sales for the second consecutive month in June. However, a significant increase in supply is necessary to bolster historically low inventories, allowing buyers more options.
Despite the current scarcity of housing options in most markets, prices continue to appreciate rapidly. Hogue points out a 2% surge in the aggregate composite MLS home price index in June from the previous month. However, he expects this pace to moderate throughout the remainder of 2023, as higher interest rates begin to constrain buyers’ purchasing budgets.
Faisal Susiwala, a broker at Re/Max Twin City, observes that buyers in Ontario’s Kitchener-Waterloo and Cambridge regions are showing hesitation. Uncertainty surrounding rate hikes and the typical slowdown in market activity during July contribute to this caution.
In regions like Guelph, Ont., the market feels less frenzied due to a rise in supply and extended days on market. Aimee Puthon, a real estate agent with Coldwell Banker Neumann Real Estate, notes that some buyers are making offers contingent on selling their existing properties. She advises sellers to remain patient, as midsummer is typically a quiet period in the market.
However, Mr. Susiwala highlights a growing concern about homeowners who are struggling to cope with higher interest rates. He strongly advises those facing financial difficulties to work with their lenders to find a solution before reaching foreclosure. Homeowners who purchased properties in 2018 with a five-year mortgage term may face challenges when renewing their mortgages at significantly higher interest rates, leading to potential distress and an increase in property listings.
An additional pressure arises as homeowners forced to sell move into the rental market, causing rental prices to surge. Mr. Susiwala encourages homeowners to weather the storm and explore options such as borrowing from family members if possible, rather than panicking and selling at a loss.
As we move towards September, the Canadian real estate market faces new dynamics and challenges. The impact of interest rate hikes, changing buyer behavior, and the financial struggles of certain homeowners are likely to shape the market’s trajectory in the coming months.
Demand is still in the game and ironclad:
Now Tembo will prodile a townhome in the Queensway that sold over $360,000 over asking in April. In search of affordable options around The Queensway, first-time buyers found themselves drawn to a 25-year-old townhouse, meticulously prepared by realtors Ken and Jaime Ramsay. To ensure an appealing reception, the Ramsays embarked on a week-long makeover, including new lighting, fresh paint, and staging, which resulted in an impressive 96 visitors over seven days.
Recognizing the significance of positioning their listing against new construction options, Ms. Ramsay emphasized the goal of refreshing the property with a modern color palette. The team ensured that every detail was immaculate, instilling confidence in potential buyers that the townhouse was move-in ready, requiring no additional work. The efforts paid off tremendously, attracting a remarkable 23 offers and ultimately achieving a record sale price of $1.265 million – the highest ever recorded for a two-bedroom condo in the complex’s history.
In comparing their sale to a neighboring property’s transaction, it became evident that the Ramsays’ attention to detail and thoughtful presentation made a significant difference. Despite the other property being larger, with three bedrooms and an ensuite washroom, it sold in January for $1.2 million, making the Ramsays’ sale all the more impressive.
The success of this townhouse sale serves as a testament to the power of thoughtful enhancements and strategic marketing in the real estate market. It demonstrates how a well-executed makeover and an appealing presentation can captivate buyers, leading to exceptional results even in the face of strong competition. For first-time buyers and sellers alike, this story provides valuable insights into maximizing property value and achieving success in today’s dynamic real estate landscape.