Homeowners either waiting for the market to come back or renting their properties
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Cancelled property listings are increasing across the Greater Toronto Area at a rapid rate, further evidence that Canada’s biggest housing market is slowing after more than a decade of rapid growth.
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Slate Realty Inc., which runs the Strata.ca real-estate platform, released a report that found that sellers scrapped 2,822 listings in June, a 643-per-cent spike from 380 cancellations in January.
“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,” Alex Hood, a Strata realtor, said 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.”
The Bank of Canada has raised the benchmark interest rate 2.25 percentage points since March, an unusually aggressive path forced on the central bank by the fastest inflation in four decades. Frothy housing markets have cooled quickly in response to higher mortgage costs. Home prices in Toronto were little changed, according to the latest Teranet-National Bank house price index, showing the year-over-year increase slowed to 19.7 per cent from 22.5 per cent in May.
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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
Alex Hood, Strata realtor
For homeowners, it is well within their right to terminate listings if they no longer want to sell, or if the contract between them and the listing agent expires before an offer is accepted. In today’s market, sellers are opting to go this route at an “unprecedented” rate, Strata said.
Anna Wong, another Strata agent, said that most sellers who have terminated their listings are waiting for a better time to re-list or have made a “shrewd” decision to rent out their property. Unlike the oversupplied sales market in the GTA, real-estate experts say the inventory of apartment rentals has fallen nearly 60 per cent since January.
Rents in Ontario are increasing at the fastest year-over-year pace since the late 1980s, according to Statistics Canada data. Rent jumped 5.4 per cent in June from a year earlier, slower than the 5.6-per-cent gain posted in May, but otherwise the biggest increase since the fall of 1989.
