Toronto homes in bull market for 20 years
For $1 million you can relocate near train tracks and drug dealers
Chander Chaddah remembers how crazy and irrational things appeared that day. He and a client went bank book to bank book with two other bidders in a bidding war to end all bidding wars, or so they thought, because what they thought at the time was: This is insane.
It was a house in a centrally located Toronto neighbourhood, with a big park and access to public transit nearby, and it was the fall of 1996, an era where bidding wars over houses were unheard of in the city.
Chaddah, a veteran Realtor, expected his client to walk away with the $199,000, 2 ½-storey gem, for about $10,000 less than the asking price.
“My guy ended up paying $211,000 for it and he was really p---ed off,” he recalled.
Today, that poor guy’s house — and he still owns it — is worth well over $1 million. A monumental sum, only not so much in Toronto, where the average price — average price — for a detached home in the city proper officially hurdled over the $1-million mark ($1,040,018 to be precise) for the first time in a calendar month, according to the Toronto Real Estate Board.
“People used to think they were rich when they had a million-dollar house,” Chaddah said. “But that is not remotely the case anymore.”
Not in Toronto, where, aside from a blip in 2008-09 when the global recession had buyers spooked and home prices momentarily dipped about 10 per cent, it has been a bull market for almost 20 years.
For $1 million, a would-be Toronto home shopper can, for example, peruse the listing for 46 Ivy Ave. sprinkled with exclamation marks (“a private drive and garage!”). Should they buy, they will get a renovated place with a main-floor “powder room” and a stucco exterior in a scruffy, gentrifying neighbourhood. There are train tracks near the house, as well, along with a major intersection where sketchy-looking characters have been known to make sketchy-looking financial transactions with other sketchy-looking characters. But get beyond the drug dealers, and you get a foot in the front door of the Toronto market.
Of course, there are alternatives. For example: moving to Saint John, N.B., stomping ground of veteran Realtor Katherine Bacon.
“For less than a million dollars I can get you a home on the ocean with a private beach,” she said: $948,000 buys a 6,500-square-foot waterfront palace on Apple Manor Lane, featuring a heated indoor pool, a hot tub and four working fireplaces.
In Regina, a shopper with a $1-million-plus budget can get 159 acres, two tractors, a five-bedroom house — and, importantly, a twocar heated garage. In Ottawa, a buyer might find a stately Edwardian-style home in the Glebe, while in Windsor, Ont., seven figures net a dwelling with a nouveau-riche spiral staircase, a wet bar and a pond out back.
In Calgary, you get heart palpitations, presumably, as the oil boom goes bust and companies shed jobs. Sales of homes fell 30 per cent in January and February, from the comparable period last year, while prices dipped about four per cent in February.
And in Vancouver, sigh, you get ... attitude.
“Toronto has some catching up to do,” said Krista Sojka, with a laugh, noting Vancouver housing blew past the $1-million threshold several years ago. More than 100 would-be buyers traipsed through a recent open house she hosted in the city’s east end for an old working-class cottage, price $1,080,000. It has sloped ceilings in the upper bedrooms anyone taller than fourfoot-eight could concuss themselves on, were they not careful.
Back in Toronto, Chaddah is preparing for another silly season in real estate. He was recently party to a bidding war in the suburbs. A bungalow sold for $750,000, $200,000 over asking.
Yes, the band plays on. But will the music ever stop?
“One of the dangers is, we have had such a robust market for so long that people can’t envision a world where houses aren’t going up 5-10 per cent a year.
“People get inured to market volatility. They get blasé.”
And, for $1 million, they get a bidding war and, perhaps, a house. And a mortgage.