The high-flying condo market isn't benefiting from lower interest rates
The broader Canadian housing market has surged since the pandemic reopening but the once-hot condo and apartment markets in Toronto and Vancouver are sputtering. It's part of a global theme of people leaving the heart of big cities during the pandemic in the hope of working remotely and finding some space and affordability.
The Globe & Mail today outlines how quickly the market dynamic has shifted:
"We are getting two, three calls per day [from tenants] to renegotiate," says Sundeep Bahl of UrbanCondo, a company that helps investor clients purchase presale condominiums and then manages the units for them once construction is complete. Mr. Bahl says he has 72 listings currently active on the Multiple Listing Service and has three associates working with him to handle the increased turnover. "There's no new tenants; we're just recycling them from one unit to another. Some are taking advantage of the situation, to be honest with you. They see the unit down the hallway that's $300 cheaper and they say 'I'm leaving.'"
Mr. Bahl says UrbanCondo has close to 600 units under management. Some owners have one or two condos in their portfolio, some have many more.
Sometimes his clients want to call the tenants' bluff and list the unit for sale or for lease and see which offer gets taken up first. But lately, what happens instead is the landlord ends up with neither a sale nor a tenant.
"There's the risk of losing the tenant and the property not selling ... [and] I can't find you another tenant. We used to have 10-12 units up for lease [at a given time], now it's 80 units," he says. "I'll put a unit for sale in one building and [get] not a single showing on some of these properties."
They note that active listings of units hit a record low of 1300 in January. They were just below 5000 in August and have now crossed 6000.
This isn't going to be a factor for the Canadian dollar for awhile but it's a boom-bust people have been predicting forever.
