Toronto's real estate market "defies all odds," but government officials should proceed cautiously when deciding how to cool it down, says a real estate agent
"To be honest, I just hope they really think about it and go slow, with a very relaxed approach," Dan Cooper, an agent with Royal LePage and CEO of Dan Cooper Group in Oakville, Ont., said Monday.
Cooper said there is a need to "relax" the Toronto market but not to "wreck" it. He said media coverage in the last few weeks has created what he called negative spin and has prompted new listings.
"Today, my group, we're putting on 13 listings. I have a lot of people who aren't even thinking of selling but they're selling because they want to take advantage of the market. They're scared. The tables are turning already."
A meeting is scheduled Tuesday between Finance Minister Bill Morneau, Ontario Finance Minister Charles Sousa and Toronto Mayor John Tory. All three are expected to discuss ways to rein in skyrocketing house prices in Toronto.
Meanwhile, the Ontario government is promising to announce affordability measures soon.
Cooper, along with Danyelle Boily, a real estate agent with Bosley Real Estate Ltd. in Toronto, told Metro Morning they are finding it difficult to advise potential buyers because of the current nature of the market.
Both agents say they are continuing to see bidding wars, buyers shifting their sights from houses to condos, buyers searching for properties farther afield, and buyers giving up entirely.
As well, Hamilton, Ont. is becoming the new hot city to buy. With its arts and music scene, Boily said it's attracting the "largest spillover" from Toronto.
Boily said the Toronto market means the process of buying has become very frustrating.
"Now, we're seeing people more afraid to put in bids, we're seeing 15 offers on a house, the inventory doesn't match the demand. People are now just out-priced by the market," she said.
"They're turning to condos, or they're giving up and deciding to rent, or they're deciding to move out of the city to a cheaper place, where they can afford more of a house."
Boily said she is telling clients simply to offer as much they can, given their budgets.
"We don't know how to advise anymore. We just know that you have to go as high as you can, and if you're out, you're out," she said. "That's just the way it is. There's no rule of thumb anymore."
Cooper, who has worked in the business for 26 years, said it's a "different game" than years ago.
"If you have a buyer who wants a property, they have go in at list or above, no conditions, certified cheque, probably double what the vendor is looking for," he said. "It's all about the seller. It's a true seller's market."
He said agents have had to adjust to the market themselves, and when they list properties, they can organize relatively short campaigns with a set date to discuss offers.
"It's something we're trying to get used to. It's all about supply and demand," he said.
Government action could help to cool the market but the challenge will be not to push it into a slump, he said. He said there is a need to bring "raw land" to the market.
Both agents said they would support a vacant home tax, which is a tax on owners of vacant homes. Toronto Mayor John Tory has said he supports the idea.
The Toronto market has been startling, with the average sale in the Greater Toronto Area skyrocketing last month to $916,567. That's up 33.2 per cent from a year ago.