For four months, Christopher Bibby anguished over how to sell a 435-square-foot condo in Toronto’s entertainment district. The unit, which was listed in March at $569,999, wasn’t visited once in its first two months on the market. There were no calls and no emails. “Those were dead months,” he said.
Bibby already thought he was giving buyers a bit of a break. He had sold a condo of the same size, with the same floor plan and in the same building for $580,000 in February. But that was before COVID-19 upended Toronto’s condo market.
After two months, Bibby trimmed the price even further to $529,999 and, coupled with loosening lockdown restrictions, that generated enough interest to do a showing every 10 days. Still, there were no offers.
It wasn’t until mid-June that Bibby and the unit’s owner were able to finally fill the unit — after putting it up for rent at a below-market rate.
Bibby’s experience is representative of a wider trend in Toronto, where it appears that these smaller units are weighing down the entire market.
According to research firm Urbanation Inc., sales of condos sized at 500 sq. ft. and under were down 20 per cent year over year in September, while sales for units of other size ranges were either flat or still positive. These micro units are also the only condos on the market to have experienced a price decline thus far. And, thanks to a tumbling sales-to-new-listings ratio, they’re the only form of housing that is firmly in buyer’s-market territory.
“It’s become clear that COVID-19 has caused two shifts in demand: A desire for more space and more value-oriented homes outside the core, both of which negatively impact the market for small condos,” said Shaun Hildebrand, president of Urbanation.
Pre-COVID-19, these condos were the hottest on the market. Investors flocked to them because they were the only form of housing under $500,000 available in Toronto and the high rents they could charge on these units meant that making profit was close to a sure thing. Most of them were snatched up on the pre-construction market and as investors became more emboldened by their returns, they bought more units, Hildebrand said.
Now they’re the ones flooding the market with listings. In September, new listings for micro units were up 165 per cent year over year. So many of these condos have hit the market, that active listings now represent 5.2 months of supply. Hildebrand said it is considered a buyer’s market when supply reaches four months.
COVID-19 turned the tide on the momentum surrounding these condos. The same people who were living in these units no longer need to be near their downtown office buildings because many of them are closed; they also can no longer enjoy the benefit of being steps away from theatres, sports arenas and restaurants that sit empty. As the
Financial Post recently reported
, many former Toronto condo owners and renters have left Toronto altogether for Hamilton.
The pandemic has all but erased the premium that tenants once had to pay for living in the downtown core, Hildebrand said. That premium usually meant paying an additional $400 in rent for an identical unit outside the core. Now, it stands at $50.
With rent coming down across the board for condos, tenants are trying to stretch every dollar, Bibby said. If $2,000 per month got them a 500 sq. ft. unit pre-pandemic, it might be enough to get them 550 sq. ft. now or perhaps 600 sq. ft. outside of the downtown core.
“With work-from-home becoming a norm, the idea of being locked in a 450-sq.-ft. condo, without access to the building’s gym, party room or rooftop patio just isn’t appealing,” Bibby said. “An extra 50 square feet makes a difference.”
Frank Polsinello, a broker of record at RE/MAX, has seen this sentiment play out in the digital ads he places on Facebook for micro condos. In the past, the comments would be lined with interested people tagging agents to see the property. Now, they’ve turned negative.
“What we’ve been seeing a lot is: ‘Why would I pay $600,000 for that 453-sq.-ft. closet?’” Polsinello said. He’s had no problem with selling larger units, but he recently had a micro condo on the market for two months without receiving a single phone call from an interested party.
Micro-condo owners are struggling to sell and rent their units because two of the main groups of people they once attracted — recent immigrants and students — are no longer clamouring for them. Immigration has slowed to a crawl during the pandemic, while the majority of university classes are being held online.
Why would I pay $600,000 for that 453-sq.-ft. closet?
There is still some interest in the units, particularly from first-time homebuyers who were previously renting and took advantage of a down market, multiple realtors told the Post. But that interest is scant. That the units are hard to distinguish from one another because the floor plans are rarely unique only compounds the problem.
“We’ve had a few that we have taken off the market recently because there’s a glut,” Polsinello said. “We’re constantly monitoring the inventory. If we see there are six, eight, 10, 12 of these things that are all identical, (buyers) have the pick of the litter and it’s going to keep driving the price down.”
And that means that for the first time in years, buyers are in control.
Vanessa Jeffrey, the broker of record at RE/MAX’s Property Shop, said she recently secured a 475-sq.-ft. condo in downtown Toronto for a client with a $450,000 bully offer when similar units had recently sold for $510,000.
“We knew they weren’t getting showings,” Jeffrey said.
Not only was their bid price accepted, but the owner agreed to her client’s conditions as well, including an inspection. In the past, asking for one would’ve automatically lost you a unit, Jeffrey said. Then, when the inspection turned up a few faucets that were leaking and a door that needed to be replaced, the owner agreed to take care of the repairs.
On the pre-construction market, Sergio Menezes, a sales representative at Condo Connect, said developers are making similar concessions to draw investors back into buying their micro units. Many have introduced what he referred to as a drawn out deposit structure. Normally, investors have to put down 15 per cent in one year to secure these units, he said, but now, they’re being given the choice of paying five per cent each year over a period of three years. Cheaper lockers and parking spaces have also been placed on the negotiating table.
Moving forward, Hildebrand expects further weakness in the market for micro condos. Although sales prices have dropped, they’ve only done so by one per cent so far. The current supply on the market suggests that further drops could be coming, he said, especially as developers wrap their work on pre-construction units and bring more of them to market.
How quickly the market recovers is directly tied to COVID-19, he said.
“How long demand will be impacted depends on how the downtown market recovers, which is an evolution of the current health crisis,” Hildebrand said. “When does immigration bounce back? When do students return? When do office workers go back into their offices? It’s hard to say, but in the near term it looks likely that prices are going to trend lower.”
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
