Toronto house gets flood of offers and sells for $420,000 above asking in 'ridiculous' market

TORONTO -

A Toronto townhouse on a busy street that drew multiple offers and sold for $420,000 above asking is a sign there is still plenty of heat left in the city’s red-hot market.

But even as sellers are celebrating, there are warnings that the true costs of the high prices will be borne by local businesses facing labour shortages and a generation unable to own their homes.

"The property was a very good product. We’re lucky to have this property," selling realtor Teuta Guci told CTV News Toronto.

The three-bedroom townhouse, on Coxwell Avenue north of Michael Garron Hospital, attracted four bids and ended up selling for $1.52 million dollars, or almost 40 per cent over the asking price.

"We thought we did good. It was a really great price," she said.

The lack of a yard in the townhouse was made up for by the fact it had been recently renovated and showed very well, Guci said.

Figures released from Royal LePage's House Price Survey show after the pandemic-related downturn last year, low interest rates and new buyer confidence have pushed the GTA back into a sellers' market.

"The housing industry, as many people know by now, has been on fire," said Royal LePage’s president, Phil Soper.

And low supply of homes to buy, compared to a lot of people looking, has contributed to many price hikes, he said.

"It's ridiculous. So much demand, and so few homes for sale," he said.

Figures from Royal LePage’s housing survey showed the median price of a detached home in the GTA is $1.301 million, up 28.2 per cent since last year’s slump.

The median price of a condo in the GTA is now $630,000, up 8.6 per cent since last year.

The price jumps in the city, the low supply, and the ease of working remotely are likely making non-urban properties more attractive — single family homes in Milton for example jumped 40 per cent since last year.

Those figures are comparing the second quarter of 2021 to the second quarter of 2020. When compared to the first quarter, it’s clear the market has cooled somewhat, Soper said.

But economist Mike Moffatt of Western University’s Richard Ivey School of Business said the downside of high home prices is that they could damage the local economy in the long run.

“We’re already hearing about labour shortages and part of that could be because people can’t afford to live where the jobs are,” Moffatt said.

“Vancouver is one example, San Francisco is another, where you have these high housing prices that are keeping out talent and forcing people to move away from the city,” he said.

The City of Toronto is proposing a vacancy tax, which may have a small impact, he said.

“It could get some of the homes on the market that are empty, but it’s not a silver bullet,” he said. “We’ve seen that in Vancouver, where it helped a bit on the margins, but prices are still going up,” he said.

Guci agreed the market has changed since even a few months ago. But she said the sellers still have the advantage.

“The buyers are outside. And we are in Toronto, the subway is here, downtown is here, you know, I think this is going to last,” she said.