Posthaste: Sellers are swarming Canada's housing market — especially in these cities

financialpost.com:

Sellers are streaming back into the housing market, inflating inventories in Canada’s biggest cities and handing more bargaining power to potential buyers.

The Bank of Canada‘s slight cut to interest rates last month enticed some buyers off the sidelines, but not enough to absorb the new inventory that’s been building for months, said Royal Bank of Canada economist Rachel Battaglia in a report out yesterday.

“Growth in new listings continued to outpace sales in Canada’s more expensive markets, and inventories are continuing to grow — even in the busy Calgary market,” she said.

“The influx of supply has shifted more of the bargaining power to buyers, who in some markets are still extracting price concessions from sellers.”

Many sellers are likely timing their move ahead of interest rate cuts, expecting a rebound in demand, says her report. There may also be more homeowners and investors who are compelled to sell because of financial strains.

Buyers, however, have yet to return en masse and a recent poll by the Toronto Regional Real Estate Board suggested it would take a cumulative interest rate cut of 100 basis points or more to significantly spur home sales.

No where is the rush to sell more apparent than in the country’s biggest city.

Almost 18,000 new units went up for sale in Toronto in June, an 9.3 per cent rise from the month before and the third monthly increase in a row.

Active listings are now up 68 per cent from a year ago, with condo listings up 84 per cent. Listings for single-detached homes are up 56 per cent.

“A slight uptick in sales activity (4.2 per cent) from May helped absorb some of the new inventory on the market, but not enough to keep active listings from reaching a 14-year high of 23,600 in June,”