Here’s another major sign Toronto’s real estate market is in big trouble right now
There are a handful of trends that show how badly Toronto's housing market is flopping right now, and the latest may be the most concerning of all.
As noted by local mortgage expert Jason Geall on his well-followed TikTok account covering the market, more and more owners are defaulting on their mortgages, leading to an increase in cases of power of sale.
"Is this going to be the new norm? Seeing 'power of sale' on top of for sale signs?" Geall asked in a video Monday, standing in front of a property in the bougie York Mills area of Toronto.
In the background, viewers can see an example of the phenomenon he's talking about, in this case, for a vacant plot of land that lenders have seized to sell and get their money back.
The property on Bayview Ridge Crescent is currently listed for $3.15 million, advertised as the perfect, building permit-ready opportunity for someone's dream castle — except that virtually everyone is balking at the current market with its high interest rates and instability.
"We've been hearing so much about power of sales going up and up in the last little while — is this the start?" he adds, referring to a graph showing, per data from the Toronto Regional Real Estate Board, that residential power of sale listings in the GTA broke new records in October.
"Seeing this type of stuff even in the high end areas is definitely kind of concerning."
New residential power of sale listings on TRREB hit another record in October pic.twitter.com/sGjtfTyjk2
— Daniel Foch (@daniel_foch) November 1, 2023
This is just one example of things extremely atypical of our perpetually (and still) overpriced market: major developments put on hold, sales slowing to a trickle and buyers walking away from hefty deposits knowing their finished home won't be worth what they paid.
Then there are the indications of a new type of desperation from those who have always had the upper hand in the market — sellers — with homes sitting on the market for far longer than ever, going for below asking price.
In addition, strange new rentals popping up as they try to acquire tenants to cover higher mortgage costs.
While this is all good news for buyers, those who can afford a home in and around Toronto right now, even if prices slide, are limited to a select few demographics, given current lending rates.
Even wealthy investors, who have an alarmingly vast stake in the city's real estate, are being scared off.
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:format(webp)/https://www.thestar.com/content/dam/thestar/business/2023/02/15/toronto-builder-albion-building-consultant-has-license-to-build-and-sell-homes-revoked/new_home_construction.jpg "Toronto’s Albion Creating Advisor has license to develop revoked")
