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Toronto Bidding Wars in a Global Pandemic
Dated: March 11 2021
Despite a global pandemic, Toronto’s housing market saw a proliferation of bidding wars and skyrocketing housing prices. How is this even possible when many are out of work and should be staying home? COVID-19 has left a significant impression on Toronto’s real estate market.
As a whole, bidding wars are not unusual in Toronto because of limited supply and demand. Bidding wars used to be much more prevalent in only the most sought-after communities, but in this current market, even the most modest homes are being fought over since the housing supply is so limited. However, in 2021, as we’re recovering from the throes of COVID-19, bidding wars for most property types are commonplace.
But Why Right Now?
When more buyers arrive in the market simultaneously and more buyers are pursuing a limited housing supply, it’s easy to see why these bidding wars start and continue to skyrocket home prices. With an influx of people working from home and saving cash on child care expenses, commutes, and keeping that extra disposable income, buyers were more willing to pay top dollar for larger detached homes in the suburbs or even other provinces.
COVID-19 has also changed how we use the space in our homes. Now that many work, play, live, learn, etc. - all from home - people desire more room to do just that. Many buyers seek space for home offices, outdoor spaces for pets and recreation, or even space for their extended families. Now that many urban dwellers can work from anywhere, people have become unattached to the bustling city life. The pandemic has exacerbated this departure from the city for more rural areas (with more available space) as people spend more time in their homes than ever before.
Lower interest rates have also played a large part in these bidding wars and rising prices. With a decline in interest rates, people have been able to finance larger property purchases. As the economy continues to recover, these low mortgage interest rates are expected to rise again. For now, these low rates are an excellent tool for homebuyers to pay a higher price for a home.
No matter what, the Toronto housing market is moving swiftly for buyers and sellers. Be prepared and ready to act if you see something that could potentially fit your lifestyle, or avoid bidding wars altogether with new building projects happening all the time!. Seek out assistance from an experienced agent,Jay Banrjei, to guide you through making an offer on a new home!
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COVID-19 reshaped the Canadian housing market, and its effects are far from over. A survey by Royal LePage supports that approximately 25% of Canadians aged 25-35 bought homes during the pandemic.