House sales were up just 2.1 per cent in February, year over year, but prices jumped 8.6 per cent as buyers battled bitter weather and a shortage of new listings in what even many realtors are concerned is a worrisome new level of desperation to buy a house in Toronto.
The average sale price was $553,193 in February, up from $509,396 a year ago.
Just this week, the battle lines were tightly drawn on an up-and-coming street in the Coxwell and Danforth area where a renovated semi-detached house, listed for $549,000, drew a stunning 25 bids. The Rhodes Ave. home went for $717,336, almost $170,000 over the asking price.
And expect more of that to come, cautions BMO Economics in a home-buying report released Wednesday that found the appetite for bidding wars is highest in Toronto, with some 44 per cent of folks surveyed saying they would get into a multiple-bidding situation in their efforts to find a house.
Vancouverites are almost equally poised for battle, at 41 per cent. Sales in Canada’s priciest city were up almost 41 per cent in February, year over year, and the average price of a detached home hit $1.36 million.
Across the rest of the country, just one in three people surveyed said they’d enter a bidding war for the house of their dreams.
All that pent-up demand is hitting the market at the same time that listings are unusually low, resulting in a sort of anything-goes mentality among house hunters, armed with low-rate mortgages and battered, in many cases, from two or three bidding wars already.
The reason is simple: New listings for houses, in particular, have remained below historic norms since the recession yet interest rates have remained so low, more people are looking to buy.
January saw a dramatic decline, when new listings were down 16 per cent. And while they have been slowly creeping up as the peak spring buying season approaches, new listing were still down 1 per cent in February year over year and active listings were down 12.2 per cent as house hunters snapped up anything they could.
Some buyers are reportedly now registering bids on houses they think they like but haven’t actually had time to see yet, just so they are in the loop as the deadline for bids approaches. They know they have time to withdraw once they’ve seen the home but fear it will be gone otherwise before they can.
“Nobody is moving (and putting their homes up for sale.) The demand so far exceeds the supply that buyers are just so frustrated,” says Toronto realtor Duncan Fremlin.
In fact, most of the uptick in GTA house sales in February was for condominiums – where ample supply is keeping demand and prices more stable – as sales spiked by 12.5 per cent, according to Toronto Real Estate Board figures released Wednesday.
Even then, the average condo sales price was up almost 5 per cent, year over year, with the average sale price hitting $347,222 across the GTA ($372,628 in Toronto and $290,650 in the suburbs). “I think the big story is how well Canadian home sales – and even more so prices – have held up during the extremely harsh winter we have had across most of the country,” says BMO chief economist Douglas Porter.
“Clearly many people are still more than willing to brave the elements to go home shopping.”
Sales of detached homes were down by 0.1 per cent across the GTA and most dramatically in the City of Toronto where sales declined 8 per cent, year over year, but prices were up 15.7 per cent bringing the average sales price perilously close to $1 million – the average detached in the city sold for $955,314 in February, largely reflecting the impact of intense competition.
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