The deceleration in the Toronto-area real estate market continues as buyers and sellers come to grips with the most recent interest rate hike by the Bank of Canada.
“I’m hearing a lot of ‘wait-and-see,’ ” says real estate agent Manu Singh of Right at Home Realty Inc. “They’re feeling a bit paralyzed.”
Amidst the confusion, some properties are seeing sluggish activity while some outliers are creating a frenzy.
“Every week it feels like it’s different with the market.”
Mr. Singh is working with clients who entered the contest for a four-bedroom detached house in the Baby Point neighbourhood in Toronto’s west end.
The house was listed with a below-market asking price around the $2.8-million mark and Mr. Singh estimated it would sell for $3.2-million or possibly $3.3-milllion.
“In this market — especially the Toronto market but it’s also shifted to Ottawa, Barrie, Burlington, and elsewhere — it would be very rare to see a condition on a home inspection,” said John Lusink, president of Toronto-based Right At Home Realty.
“Most realtors would be saying, ‘If you put that condition in, you will never ever get a home in the current market.’”
So is it still possible for buyers to protect themselves against hidden defects and costly repairs, and still obtain a home in an in-demand neighbourhood? Experts say yes, as long as they’re willing to think outside the box.
The Duke Street apartment offers more than 1,100 square feet of living space. Located close to downtown Hamilton and within walking distance to James Street North, this co-op apartment is one of just a handful of units listed in the surrounding. neighbourhood.
Due to the nature of co-op buildings, which require buyers to pay for the unit upfront as opposed to getting a mortgage, the flat could be a good fit for “someone who is downsizing,” said Sheri Sullivan, a salesperson with Right At Home Realty Inc. “They’re selling their primary residence and they have the equity out of that home where they can come forward and purchase the unit free and clear,” said Sullivan, noting it could also be an “affordable option” for first-time buyers.
Sullivan said buyers are required to complete a police check as well as a credit check and go through an interview process with the co-op board before they can be approved. The unit also has a monthly fee of $950, which includes property taxes, building insurance and maintenance, water, gas and parking.
When purchasing a property with someone other than your partner or spouse, don’t forget to consider all the angles. Get to know the co-ownership process, say experts, as it is somewhat different than buying a home in the traditional sense. Rather than securing a mortgage, for example, you’ll need a tenancy-in-common agreement, which is often more challenging to acquire. You’ll also need to establish a co-ownership agreement.
“People must educate themselves,” says CPA Saman Habibi, sales representative at Durham-based real estate brokerage Right At Home Realty Inc. Habibi adds that you’ll also want to know the parties involved in the purchasing process (lawyers, realtors, mortgage professionals who specialize in co-ownership scenarios), as well as the costs that will be incurred (such as legal and realtor fees). “A home is generally the biggest purchase anybody makes in their life and you may be keen to jump in head first without worrying much about the consequences,” he says. “But just because something sounds good, that doesn’t mean it can work for everybody. It can end up being a big headache.”
Not all real estate agents are created equal. But when the market’s moving at a maniacal pace, consumers can feel justified in making hasty decisions when choosing an agent.
“Both buyers and sellers need to interview a few prospective agents, even if they receive a referral to an agent, so they have some sense of compatibility and skill,” says John Lusink, President & Broker of Record at real estate brokerage Right at Home Realty. “While everything real estate seems to be going at full speed, this is exactly where the consumer needs to slow down and take their time.”
The Toronto-area real estate market is ending 2021 with a burst of energy from buyers who want to clinch a deal before the year ends.
Manu Singh, a real estate agent with Right at Home Realty Inc., has seen market psychology change all through the fall. In early December, he senses that some buyers are rushing towards the finish line. Mr. Singh believes the lack of inventory, the threat of rising interest rates and an expected increase in immigration are all contributing to market sentiment. “Buyers are more reactive to news,” he says. “It changes from week to week.”
Looking ahead, Mr. Singh expects buyers to keep a keen eye on interest rates and levels of inventory.
- In the News