The circa-1895 house at 67 Madison Ave. in Toronto's Annex has an asking price of $4.795-million.Sotheby’s International Realty Canada
Motivated sellers are reducing their asking prices in the Toronto-area real estate market as competing properties arrive in July.
Buyers are taking notice.
Andre Kutyan, broker with Harvey Kalles Real Estate, is advising sellers who haven’t struck a deal quickly to reduce their asking price.
For homeowners listing for the first time this summer, he recommends an “aggressive” asking price from the start.
The enclave of Lawrence Park, for example, kicked off July with a relatively bulging supply of 25 properties with asking prices ranging from $3.695-million to $10.995-million.
While many have been relisted multiples times, Mr. Kutyan says, eight are fresh listings.
“That’s just a microcosm of what’s happening elsewhere,” Mr. Kutyan says of the flow of new listings at a time when the market traditionally slows down.
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Mr. Kutyan cut asking prices for three of his own listings in the dwindling days of June.
At 12 Tetbury Cres., Mr. Kutyan trimmed the asking price for a contemporary four-bedroom house to $4.99-million from $5.299-million.
On a cul-de-sac near Yonge Street south of Lawrence Avenue, Mr. Kutyan lowered the asking price of a three-bedroom detached house to $2.199-million from $2.349-million in mid-June after 19 days on the market.
The latest asking price is below the amount the sellers paid in a bidding war in February, 2022 at the market’s high point. At that time they paid $2.52-million for the home listed with an asking price of $1.995-million, then paid for renovations.
Mr. Kutyan says the improvements may help to attract buyers in the current market, but the homeowners are unlikely to get what they paid for the property because prices in the area have fallen between 10 and 15 per cent since then.
“They’re listening – they’re pro-active,” he says. “They’re trying to mitigate their loss.”
In the Bedford Park neighbourhood, sellers of a four-bedroom house at 164 Dunblaine Ave. waited until May to list in order to highlight the backyard pool with a waterfall and hot tub.
Mr. Kutyan listed the seven-year-old house with an asking price of $3.999-million and received only one lowball offer, which the sellers rejected.
After 37 days on market, Mr. Kutyan lowered the asking price to $3.799-million.
Mr. Kutyan analyzed the transactions that had taken place in the area and found that most were around the $3.5-million and $3.6-million mark.
The buyers were paying less for large, older homes in better locales.
“They’re choosing size over your house,” Mr. Kutyan informed the sellers on Dunblaine, who agreed to the price cut.
Elli Davis, real estate agent with Sotheby’s International Realty Canada believes July is not a bad time to launch new properties because some of the sellers who failed to find a buyer in the spring may pull their listings for the summer.
Ms. Davis recently listed a circa-1895 house in the Annex with an asking price of $4.795-million.
Any rebound in the real estate market may remain limited in the GTA given the increase in unemployment.Sotheby’s International Realty Canada
There are quite a few other homes for sale in the neighbourhood, she says, so setting a realistic asking price for the three-storey semi-detached house was important. She stresses that sellers need to be flexible about allowing showings at the buyers’ convenience.
“If you can’t get a showing, you can’t get a sale.”
Many buyers feel no rush, but some are being decisive, she says, pointing to a transaction in the $1.7-million range for a two-bedroom-plus den condo apartment.
The out-of-town buyer landed in Toronto for two days and saw 10 to 15 units before he purchased a unit in the 30-year-old building at 2900 Yonge St.
“The sellers were serious, and the buyer was serious. If you put them together you have a sale.”
Ms. Davis cautions buyers that lining up financing is more arduous these days.
She helped one client purchase a condo unit as he prepared to downsize from a multimillion dollar house. The client assured Ms. Davis he had consulted his bank and he was given the green light to close on the new property before selling the existing one.
As the closing date approached, the client informed Ms. Davis the lender would not provide the bridge financing he needed.
“It turns out he had nothing in writing,” she says. “I was shocked when he said he couldn’t close.”
Ms. Davis scrambled to have the closing date extended, and the client was forced to pay interest penalties for the months that it took to sell his house.
Economist Daren King of National Bank of Canada says the overall market in the Greater Toronto Area firmed up slightly in June compared with May, but conditions remain soft compared with the past two decades.
Sales in the GTA dipped 2.4 per cent in June from the same month last year to reach their lowest level for the month since 2000. Active listings jumped 33.8 per cent from June, 2024 to stand at their highest level on record.
The average price in the GTA fell 5.4 per cent in June from the same month last year to stand at $1,101,691.
Compared with May, sales in the GTA in June rose 8.1 per cent on a seasonally adjusted basis, according to the Toronto Regional Real Estate Board, while new listings dipped 4.7 per cent.
Mr. King points out that active listings edged down 2.2 per cent in June from May.
The de-escalation of the trade conflict with the United States during June likely led to a slight recovery in consumer confidence and, in turn, an uptick in activity in the real estate market, Mr. King says.
Many buyers feel no rush, but some are being decisive.Sotheby’s International Realty Canada
The economist says that trend may continue in the coming months, barring any geopolitical setbacks, but he expects any rebound to remain limited in the GTA given the increase in unemployment.
Those challenging conditions in the current market make for some tortured negotiations, Mr. Kutyan says.
Sellers of one high-end home received an offer within a month of listing at about 92 per cent of the asking price, he says, but their minds were stuck at a number closer to 97 per cent of the asking price.
Weeks of haggling ensued and the two side drew close, but the buyers drew a line in the sand.
“The buyers said, ‘that’s it,’” says Mr. Kutyan. “The sellers said, ‘we haven’t exposed it enough.’”
When a few weeks passed without additional offers, the sellers slowly warmed to the idea that the deal may have been the best they would get, Mr. Kutyan says, so he attempted to jump start negotiations with a new offer to the buyers.
They refused to return to the table.
Fresh supply had arrived on the market during those weeks, he points out, and the buyers’ ardour had cooled.
“It’s just too much time to think,” he says.