Dana Kayali is preparing for battle. Clutching a stack of home ads, the pension fund manager and her fiancee brave a swarm of about 30 people on a recent Saturday and step into the first of four open houses of the day. They’re all searching for what’s dawning on Kayali is a fantasy: a detached home in downtown Toronto for under C$1 million.
She’s immediately deflated. The floor in the master bedroom slopes up about half a foot, the upstairs hallway is so narrow another house hunter has to squeeze through sideways and an inspection report recommends that parts of the roof, outer walls, and back porch need to be replaced within two years because there’s a risk of water damage. It’s listed for C$699,900. Seven days and seven bids later, it sells for C$1.05 million.
“It’s terrible, it’s just discouraging,” Kayali, 27, said. “You go to the open houses and it’s mostly couples like us. And we’re all in the same boat, looking at one another and I’m thinking ‘O.K. You’re probably outbidding me.’” Just last week they hoped to bid on a semi-detached home similar in size and a five-minute drive away. The next day, it sold for C$1.4 million, 42 percent over asking.
Speak to prospective buyers in Toronto, where home prices surged the most in almost 30 years in January from a year earlier, and supply is tighter than Manhattan, and you hear the same lament: there’s nothing remotely affordable to buy. The desperation is sparking bidding wars and price gains in cities even a two-hour drive from downtown. The “bubble” word is regularly used to describe the market, and there’s little on the horizon to pop it with immigration booming, the economy strengthening and interest rates unlikely to rise soon.