The stage has been set, in some regions across the country, for full out bidding wars to take place.
Most notably, in some pockets of British Colombia, Ontario, Quebec and Atlantic Canada, homes are currently selling above asking price, according to a new survey released by BMO.
According to BMO, 16% of Canadians have been caught in a bidding war during the home buying process. The survey shows that many buyers (58%) are willing to fight for their property of choice, having included some pricing flexibility in their home buying budget.
Other highlights from the survey include: Quebec is the region where bidding wars are the least likely to happen- 4%; 25% of BC residents have been caught in a bidding war ,followed by Ontario (21%), the Prairies (16%), Atlantic Canada (14 %) and Alberta (13 %).
There is a difference as well, based on properties in rural, suburban and urban areas. (17%, 16 % and 11% respectively).
94% of Canadians enter into a purchase with a very specific price in mind, while 58 % indicated that they could be flexible, if the situation demanded it.
Toronto Realtor, Mike Cunningham, Bosley Real Estate Limited, told Propertywire.ca that he sees this routinely in his market. “This is a situation that has been the norm in certain neighbourhoods throughout the GTA. Homeowners in Riverdale, for example, are very well informed on what a home can sell for and therefore price it to attract multiple offers. It is a sought after pocket of the city and sellers are aware of what buyers are willing to do to get in there.”
“Certain highlights of a house, such as parking or a back yard, are strong indicators of what it can fetch and houses with such amenities are selling for well over the asking price. Bully offers in these areas are also not uncommon if the buyer wants the house and is willing to pay to not be involved in a bidding war.”
The BMO survey also indicated that the national housing market can essentially be divided into two sections: Vancouver and the rest of Canada. The main driver behind this is apparently foreign investment.
“Vancouver house prices are up 13.4 per cent in the past year to March, while the rest of the country saw prices rise a more moderate 4.3 per cent. A few other cities are also experiencing strong price growth, including Regina (9.8 per cent), Winnipeg (6.5 per cent) and Toronto (4.9 per cent), reflecting sellers’ markets and the potential for bidding wars in some areas,” said Sal Guatieri, Senior Economist, BMO Capital Markets
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