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In mid-June, Shannon Tebb put her loft apartment in downtown Toronto for sale, and she did everything she could to attract buyers: decorating the house, painting the walls, cleaning the windows, listing it at below-market prices and advertising everywhere.
But in July, she removed the property from the market-not because she had found a seller, but because the market had changed dramatically, and the bidding wars and crazy sales speeds that emerged earlier this year had disappeared.
In fact, sellers like Tebb who suspend the listing of their houses abound!
Last month, the Canadian Real Estate Association (CREA) reported that home sales reached 48176 in June, down 24 per cent from 63280 in the same period last year and down nearly 6 per cent from May on a seasonally adjusted basis.
The main reasons for the decline in house prices are interest rates and inflation. Interest rates are rising faster than some expected, pushing up borrowing costs, while inflation recently reached a 39-year high.
Both cases make it the norm for weeks or months of idle property, forcing sellers to make tough decisions.
As not many people were interested in her listing, Tebb terminated the deal and changed the loft apartment into a rental property. “everyone is saying,’No one will look at the house,’so we reduced the price. Some people came in, but no one offered. ”
Real estate agency Strata has found that more and more people are following Tebb’s example by delisting their properties. In the hot market in January, there were only 380 terminated apartments in the greater Toronto area, but by June there were 2822, up 64.3 per cent from a year earlier.
“We see a lot of sellers not getting the price they want, so they say,’We have to wait,’or’I don’t want to be 50, 000 lower than the neighbor’s price a month ago, because that’s a lot of money,'” said Anna Wong, a sales representative at Strata. ”
“We were in the seller’s market for some time. Now the seller is struggling to adjust. ”
Average house prices across the country fell 2 per cent in June from a year earlier to C $665800, a seasonally adjusted 4 per cent lower than in May, CREA found.
“We see some sellers sticking to the market. They are putting their properties up for sale, trying to get the previous prices, and they will continue to sell for a long time, “said Dan Campanella, a lawyer representing Tebb.
Some people stop listing and continue to live in these houses, waiting for a better time to sell, but others do not get the offer they want and turn to the rental market, where rents soar.
Rental.ca also found that average rents in Canada rose 9.5 per cent from a year earlier, while average rents in Vancouver and Calgary rose 24.7 per cent and 26.1 per cent year-on-year.
The rental market is so hot, largely because potential first-time buyers are not going to buy a house.
The relevant practitioners mentioned: “the purchasing power has dropped sharply and can not buy the first apartment, but potential buyers still need to move to the city center, so now this means that more and more people are renting, and rents are skyrocketing!”
Anne Hermary, a Vancouver real estate consultant at Royal LePage Westside, has also seen a surge in the rental market.
Although she has not yet dealt with any termination of listing, she suspects that some sellers will not be involved in the listing of houses at all because of the current situation. “I feel that customers who own real estate do not necessarily need to sell their houses. They may have been thinking about it and waiting to see what happens. ”
In addition, buyers are also waiting. “some people want to buy a house but can’t get loan approval, but some people are just waiting because they think the market price will continue to fall.”