(Source: Globe and Mail)
‘We’re still holding out for the first buyer’
Many small builders and renovators are stepping back from the uncertainty of the current housing market. Others — caught in the squeeze of falling prices — are quietly shelving projects or putting properties up for sale halfway through construction. In many neighbourhoods of Toronto, run-down houses have been left standing with papered-over windows.
Other houses, with asking prices that reflect the 2008 building and labour costs that went into them, are languishing on the market.
Paul Johnston is a real estate agent with Right at Home Realty in Toronto.
As an agent, Mr. Johnston is hearing very little from clients who want to scout for properties.
“I don’t think there’s a terrific appetite to acquire new land,” he says. “Six to eight months ago, people were doing almost anything to buy land.”
Mr. Johnston says another segment of the market was occupied by contractors who would buy a ramshackle property, gut it, renovate and put it up for sale again.
“The flippers — the guys who just spend a month at Home Depot — have all but disappeared,” Mr. Johnston says. “That is just categorically not the story any more. I think most of them are on the sidelines.”
“It’s really sad because, at the height of the market, people were buying houses that were really substandard. Thankfully, they’re not moving any more.”
Mr. Johnston says builders had good reason to push the pause button last September. Not only did it become apparent that labour costs were set to fall, but suppliers of paint, lumber, wiring and all kinds of other materials had to cut better deals.
“The whole financial picture changed. All of the spreadsheets from last summer don’t work.”
Read Carolyn Ireland’s full story “Infill builders out cold” in the Globe and Mail (March 20 2009)