“[Investors] are kind of rushed to make a decision,” says Celine Xu, an agent with Re/Max Realtron. “That’s why we have several offers for some properties.”
Typical investors and buyers are now revisiting the properties they once overlooked, especially detached single-family homes in cities like Toronto
Particularly, homes that require a complete gut – the same ones that investors and property flippers tended to scoop up at a discount – are now more attractive to all buyers because of the severe shortage of listings in many of Canada’s larger cities.
“All I can do is show them what’s available right now,” says Casey Ragan, an agent with Re/Max Hallmark. “There are so many end users that it’s hard to make money.
"Properties are selling for $100,000 more than they should be. And the end user ends up paying more than the investor who is looking for a return.”
The key, says Ragan, is educating investors about the changing market.
“You have to let them know how [the market] is, this is what you’re getting into,” he says. “You have to prepare them. If you don’t, the process is stressful.”
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The market frenzy caused by a shortage in listings has extended to many investors, who find themselves hard-pressed to purchase a property at a decent price – a task that’s set to become even more challenging following the Bank of Canada’s surprising decision to lower interest rates.