Toronto condo sellers use inventive tactics, like reverse offers, as listings surge and buyer competition wanes
A surge of property listings in Canadian housing markets is providing qualified buyers with a variety of options, forcing some sellers to get creative to secure deals, according to Global News.
In Toronto, a glut of condos is prompting sellers to adopt unconventional strategies. Davelle Morrison, a Toronto real estate agent, mentioned that one of her clients used a “reverse offer” to sell a condo. Initially, interested buyers and the seller could not agree on a price.
After three weeks, Morrison suggested her client re-approach a previously rejected buyer with a lower price. This led to further negotiations, resulting in a successful sale.
While competition remains intense for houses, the condo market faces greater challenges. Morrison noted that it's difficult to attract even showings for condos in Toronto. Although reverse offers are rare, Morrison believes sellers need to think creatively to secure offers.
“People are definitely more open to getting creative to get that condo sold, because right now, the condo market is quiet,” she said.
Nationally, home sales decreased in May, according to the Canadian Real Estate Association (CREA), even as markets like Calgary, Edmonton, and Saskatoon saw increased activity.
Despite the lack of buyers, sellers remain active, with approximately 175,000 property listings across Canada, a 28.4 percent increase year-over-year. In the Greater Toronto Area, there are about 24,000 units for sale, including condos and detached homes, marking a 14-year high.
John Pasalis, president of Realosophy Realty, pointed out that active listings for condos in Toronto are near record highs. However, high borrowing costs continue to price many buyers out of the market.
Despite a recent interest rate cut by the Bank of Canada, rates remain too high to significantly boost demand. CREA representatives hope the rate cut will stimulate the market in the fall, but recent polling indicates that potential buyers need more substantial rate cuts to re-enter the market.
First-time buyers, particularly in expensive markets like Toronto and Vancouver, face significant barriers. Desmond Brown, a Toronto-based realtor, observed that buyers lack confidence, causing condo sellers to hold properties longer.
Brown advises clients to sell their properties before searching for a new home. He expects the market to pick up in the fall if more rate cuts occur and advises patience.
CREA reported that home prices remained stable in most markets in May. Morrison noted that buyers have more negotiating power now compared to the pandemic-era market frenzy.
In Vancouver, condo sales dropped nearly 23 percent year-over-year in May, but the sales-to-active listings ratio suggests upward pressure on prices. Andrew Lis of the Real Estate Board of Greater Vancouver believes rising inventories could benefit qualified buyers this summer despite high borrowing costs.
Pasalis mentioned that many condo sellers in Toronto are investors struggling with high borrowing costs and unable to raise rents sufficiently. He expects some sellers to lower prices to attract buyers, which could put downward pressure on home values.
However, he cautioned that price declines tend to be gradual.
Shaun Cathcart, CREA’s senior economist, noted that despite the robust housing supply, inventory levels remain below historic averages. Canada had 4.4 months of inventory in May, up from 4.2 months in April, but still below the long-term average of five months.
Cathcart anticipates that with more rate cuts, inventory levels will decrease, and prices could rise as more buyers enter the market. He suggests buyers may find deals before others re-enter the market.
