Buyers in the upper echelons of Toronto’s real estate market are moving decisively when they see the right property.
A grand Rosedale house sold for $6.398-million soon after it was listed with an asking price of $6.45-million
The traditional five-bedroom house at 40 Edgar Ave. sits on a large lot across from Whitney Park and just a few doors down from Gradale Academy. Listing agent Janet Lindsay of Chestnut Park Real Estate Ltd. says the property was purchased by a buyer who coveted the location.
“Being close to the school was important,” Ms. Lindsay says.
Ms. Lindsay recently had multiple buyers sparring for a downtown condo unit listed with an asking price above $500,000.
Agents around the city are reporting that the swell in listings that normally arrives with the spring real estate market in Toronto does appear to be building. It’s not clear yet if new supply will come in a surge or a gentle wave after this month’s Easter long weekend.
The latest numbers from the Toronto Real Estate Board show that the average price in the Greater Toronto Area jumped a sizzling 33 per cent in March, compared with the same month last year.
A few agents report seeing the first signs of buyers wilting under the pressures of competition but, for the most part, single-family dwellings and many condo units are drawing multiple offers. Bullies – who refuse to wait for a set offer date – are also out in force. Sellers add to the pressure because their expectations are so high.
The intensity of the market and the scarcity of listings is prompting some agents to look for new ways to gain an edge.
In the Beaches neighbourhood of Toronto, two rival teams are merging.
DeClute Real Estate and Wright Sisters Group plan to announce on Monday that they are joining their marketing and sales teams under the name Union Realty Inc. Their warehouses full of furniture and art for staging will also be combined, along with the small fleet of trucks they need to cart the items from house to house.
Rochelle DeClute says the family-run businesses have been competing head-on for listings in the Beaches for years. The two teams of siblings also worked in the offices of the same large brokerage several years ago.
“As we talked about how tough the market is, we found it just made sense,” Ms. DeClute says of joining forces.
On Monday night, for example, the DeClutes sold two houses with multiple offers on both. At 81 Lyall Ave. in the Upper Beaches, a semi-detached house with an asking price of $1.049-million sold for $1.315-million with six competitors. A detached, topped-up bungalow at 167 Wheeler Ave. received five offers and sold for $1,765,176 after it was listed for $1.539-million.
With so much competition, buyers are forced to decide almost instantly, Ms. DeClute says.
“You hear about properties where no one’s been in the front door.”
She figures it will help clients if the teams share information about upcoming listings; agents will often give their own buyers a heads-up before a property hits the market. She adds that prospective buyers can look into the local schools or check out the neighbourhood when they know what’s in the pipeline. She always recommends, however, that sellers expose their properties to the broadest market possible.
“How do we know if we have the highest offer in our office? If we have a buyer, the office down the street does and maybe somebody in Jakarta will come in.”
Ms. DeClute and her brother, Rick, followed their grandmother, father and mother into the family business. Sisters Melanie and Lindsay Wright led their own team at ReMax Hallmark.
Ms. DeClute adds that Union Realty will have a greater geographic range than either team had on its own. While the DeClutes have spread into Scarborough and Durham Region, the Wright Sisters have taken on clients in Leslieville and East York.
The merger makes sense in such an insanely fast-paced market, she says, but the increased marketing clout should be a benefit even if sales don’t continue at this clip.
“I think it will work whether the market’s great or the market’s not great.”
While buyers are avidly bidding large amounts, some economists continue to sound the alarm that prices are escalating so quickly. The chief economist at Bank of Montreal worries that those arguing for increased construction will push risk higher as well.
“Do you think that the best response to the Dutch Tulip Bubble in 1637 was to cultivate more land and grow more tulips?” Douglas Porter asks rhetorically.
Mr. Porter poses the question as many players in the real estate and building-industry lobby vie for the opportunity to build more houses. A greater supply of new properties would cool Toronto’s fiery real estate market, they argue.
Mr. Porter believes that theory is flawed. He agrees supply is tight in the resale market as owners hang onto their existing houses, but building more units is not what the market needs, in his opinion.
According to Mr. Porter, history teaches that in an overheated market – or what some may even call a bubble – it’s more important to look first at cooling demand.
“With prices screaming higher by 20 per cent to 30 per cent a year, any moderate increase in housing supply will be swallowed whole in the great maw of raging demand,” he says in a note to clients.
He cites the example of the Dutch tulip bubble, which created a mania for trading in exotic bulbs. He points to other legendary bubbles, including the dot-com frenzy of 1999.
“Do you think the best response to the Dot-com Bubble of 1999 was an increased supply of shares of Pets.com or Toys.com?”
By Carolyn Ireland