More homebuying activity is expected after Labour Day in Metro Vancouver, where a heavily supplied condo market is putting pressure on sellers to trim their asking prices, says one Realtor.
This is especially true for newly constructed condos in dense neighbourhoods such as Burnaby’s Brentwood, where the median condo sale price declined 13.2 per cent year over year in July to $683,000, said Hasan Juma, a Realtor with Oakwyn Realty Ltd.
“Sellers can’t keep holding on and holding out for higher prices. At some point, something has to give,” he said.
“They are paying mortgages on these properties, they are often vacant, and so at some point the sellers say, ‘Look, we just need to move on from it.’”
Prices could moderate further for newly built, pricier two-bedrooms, whereas entry-level prices for one-bedrooms have been “relatively sticky,” Juma said.
“At that lower end, I just think there is a little bit more resiliency, especially if it’s owner-occupied,” he said.
Buyers, meanwhile, are not getting the economic certainty they crave. Their patience may be running thin, causing them to take opportunities despite weaker consumer sentiment amid a trade war.
“Prices are just starting to get at that level where buyers are saying, ‘It’s worth it for us to make a move right now, getting the property at a lower price than we might have expected a few months ago,’” Juma said.
“There’s more and more people that have really put their plans on hold this year, trying to get some stability and certainty with what might happen with the economy and jobs. I think they are realizing that we’re not going to get that certainty,” he said.
With more buyers making moves, Brentwood condos may be at a turning point. Sales activity was up almost 27 per cent last month for a total of 71 sales, possibly giving sellers an advantage, Juma said.
“In the trenches, absolutely a buyer’s market,” says another Realtor.
“When you’re in negotiations, you can feel the buyer has the power,” said Tim Hill of Tim Hill Real Estate Group, Re/Max All Points Realty.
“You don’t know when your next offer’s coming. If the majority of it’s reasonable, … it’s really difficult for a seller to turn down because it could be a couple of weeks until the next offer, or it could be a couple months,” he said.
The Bank of Canada’s next interest rate announcement on Sept. 17 may not necessarily sway potential buyers, even if the key rate is lowered.
“I’d say they’re pretty numb to interest rates right now,” he said. “That of course only affects the variable-rate mortgages, which I think are few and far between right now for new purchases.”
Hill said it’s important for sellers to present and stage their homes well in a way that attracts multiple buyer types, given heightened competition among sellers in the same building or neighbourhood.
“You have to declutter, you have to de-personalize, you have to clean, you need to be Mr. and Mrs. Sparkle,” he said. Keep some furniture to help buyers visualize the space, he added.
Labour Day is around the corner, and the region’s real estate market could shift this fall, though the exact direction remains to be seen.
“A lot of people really just want the summer lull to be done,” Hill said.
“Of course, we’re warning all of our clients that just because it becomes September doesn’t mean the market’s going to come back running.”
