Broker of record and co-founder of WE Developments Odeen Eccleston talks buyers and sellers in a post-rate cut Toronto market.

Have you noticed any changes since the first rate cut? 

Certainly some sellers were waiting for something like this to happen, so that galvanized them into putting their home on the market. But I think that agents and the industry in general were overly optimistic about the effects of the rate drop, and it was such a nominal drop. I think the optimism was that the drop would have more of a psychological effect on buyers in Toronto. But if anything, I’m just more seeing buyer fatigue — exhaustion from years of this up and down. And now it’s just unpredictable and frankly feels unsafe for buyers, because when you speak with a mortgage broker, what you can qualify for? The rates are still high for your monthly mortgage amount.

Even when buyers have so much more choice? 

There are, of course, sellers that are in a position where they need to sell, because they’ve been holding at this point for a few years, hoping to recoup their losses. The unluckiest sellers are those who happened to buy at the top of the market, and can no longer carry their mortgage. If you bump into a seller like that, you might get lucky. But because there is now so much information readily available, this not-quite-recession, but down market, is different than others in maybe the ’80s and early ’90s. Then, information wasn’t so easily accessible. So I think sellers are more confident in their willingness to tough it out, because they’re under the impression that “this too shall pass,” whereas in the past, people were panicking — they didn’t know if we’d ever get back to favourable conditions.

If anything, there are more deals to be had in the condo market because it’s been pretty slow. But there are still more sellers that are thinking, “Well, to heck with it. I’ll just rent my house out; I don’t want to sell at a significant loss.” 

What do you think buyers are waiting for? 

Prices might be down, but they’re not really, not compared to five years ago — they’re just down compared to that height in 2021. Some of our clients will head to the bank before coming to us, and it’s staggering to see — you can barely find anything at $650,000 to $700,000, and even at that price, we’re talking a mortgage rate of about $4,000 a month. I think we’d have to see the interest rate go down one full point for people to say, “OK, now we’re talking.” [Another rate cut of 25 basis points occurred after this conversation in July. —Ed.]

What types of properties are still seeing some action? 

I do notice that the listings that do fly off the shelf are the ones that are exceptional — exceptionally done, exceptionally presented. Buyers just have more choice, so they don’t need to settle for fixer-uppers in Toronto right now. Of course, the lower the price, the more activity we’re seeing. Anything over around $1.4 million, I just see people scrutinize it more.

Tertiary markets, Oshawa, Bowmanville — those places that were super hot during the pandemic, they’re taking the most losses. People bought there for exorbitant amounts of money, and now no one wants to even look at a property in some of those neighbourhoods. So we’re talking significant losses, hundreds of thousands of dollars.

I will also say, as the broker of record at a brokerage, I am seeing some of our agents get part-time jobs and look at a plan b — because the market is so stagnant right now.