The real estate market has seen various spikes in the past year, but these days buyers are ready to pay substantial amounts of money above the asking price
The real estate market has witnessed multiple spikes in the past year, but these days, buyers are ready to pay substantial amounts of money. Often above the asking price and settle for deals that come with almost no conditions, according to buyers.
While good listings are facing intense competition, desperate buyers are now resorting to paying much over the asking price so ensure they are able to win the round of bidding and land the deal.
Remember that these are not isolated cases, such bidding wars are now apparently the norm in Toronto’s housing market, but these wars are now extending to the suburbs which are probably an hour’s drive from the city and into smaller cities like Newmarket and Barrie. The hot housing market is making it very difficult for an average buyer to consider buying a new house even in suburbs when the housing battles are now much more intense.
Volumes of homes sold in the suburbs were actually much higher than the resales made in the city itself, which makes the bidding wars even more difficult to entertain. Prices for detached houses have increased 15 per cent from a year earlier, the Toronto Real Estate Board said.
Northwest of the city, In Milton, condo and house prices increased by a whopping 42 per cent this year. This aggressive increase has been attributed to the prevalent bidding wars.
Estate agents say they began noticing a change last fall when houses in Milton that came up for sale started to become involved in bidding wars. Many estate agents were caught off-guard they claim. From seeing almost no homes in the suburbs going over asking the price they now are seeing offers on listings that go well over the asking amount.
Buyers prefer the suburban houses due to low-interest rates, easy employment access etc. The Toronto suburbs also are seeing growth in jobs and higher rates of immigration. Another reason for the unprecedented increase in the housing market prices has been said to be foreign investors who are now looking to invest in not just city areas but in many suburbs as well. They are ready to pay well over the asking price and usually have no problem with buying houses with the existing further in them.
Chinese buyers pay the top dollar for properties some estate agents say, “They consider our housing market as a safe place to put their investments in,” The houses in the suburbs are now evolving; newly constructed homes are aimed at wealthier buyers and are increasing the average price of suburban homes. Million-dollar homes are now becoming the norm, an estate agent says.
Some real estate agents also mention that while demand is increasing significantly, supply is not growing proportionally, but in-fact is going down. This has led to many local buyers being pushed out the suburban locales they would have preferred into regions further away. Most real estate agents feel that the trend is not looking like it will change anytime soon and that prices are expected to stay high.