Desmond Brown

What's driving this market?

06 April 2017
Desmond Brown

I listed a detached backsplit home in the Yonge and Sheppard Avenue area not so long ago. It was built in the 1950s and had been in the same family for more than 60 years. We received 16 offers for the home and went through presentation process at my office in the Beaches.

Midway through the presentations, one of the agents who had already shown us his offer asked to speak to me. "Mr. Brown, can you please let me know if you are going to accept my client's offer? He is here with me now but has to get on a plane back to China within the next two hours." I told him his offer was lower than several we had already received and sent him away.

As you know, the Toronto real estate market is setting price records almost daily. Blind bidding wars with multiple offers on homes has become the norm. While buyers are slugging it out because of a shortage of inventory, the media, politicians, economists and real estate agents are trying to figure out why this happening.

With all due respect to journalists and economists, they don't have a clue about what is driving this real estate market through the roof, and neither do I.

The smartest thing I've heard over the past few months was released in the recent federal budget. It's the creation of the Housing Statistics Framework. The feds have committed $39.9 million over the next five years to develop nationwide data of all properties in the country and the information will start to be published by Stats Canada this fall. The Housing Statistics Framework will dig into homeowner demographics, sales, and the degree of foreign ownership of Canadian real estate.

The statistics will finally shed light on what is really driving the real estate markets in Toronto and across the country. If the stats show it's foreign buyers or investors, you can bet our politicians will get their share of it by bringing in more taxes.

Getting back to my backsplit story in the Yonge-Sheppard area, all of the bidders were either of Chinese, Asian, or Iranian descent. I have no idea if they were Canadian citizens or foreigners. All I know is that house sold for $400,000 over asking.

- Des