A new study shows that the majority of Canadians would not enter a bidding war in order to close a deal on a new home,
even though the real estate market is very hot right now. There were only about 25 percent of Canadians that were surveyed would indeed enter a bidding war on
a home that they wanted to purchase, while 75 percent of Canadian’s wouldn’t according to Leger Marketing for the Bank of Montreal.
Half of the buyers that are willing to enter bidding wars would pay up to 10 percent over the asking price.
Twenty-five percent of buyers that are willing to enter bidding wars would pay as high as 20 percent over the asking price in order to close a deal which was
all shown by a survey of 1000 home and condo owners last month.
The study showed that buyers in Ontario were most likely to enter a bidding war. According to the study done, more men were willing to enter bidding wars over women. Men were willing to bid about 20 percent over the asking price for a property. Only about one in five women were willing to pay over the asking price for a home.
The average price of a home in Canada is rising slowly with the exception of Toronto and Vancouver says the bank. The
average price of a home in Toronto is $504, 117. In Vancouver the average price of a home is $761, 742. The house prices in Toronto rose about 11 percent while
Vancouver’s average price of a home fell by 3 percent. The national average selling price of a home is $369, 677.
Excluding Toronto and Vancouver, the prices across the country are rising modestly. For most of the cities the market is well balanced and generally moderating. Canadians are encouraged to keep their emotions in check before purchasing a house to ensure that the total housing cost does not consume more than one – third of the house hold income in order to be qualified for a mortgage.
The survey that was done is considered to be accurate with 3.1 percentage points, 19 out of 20 times.
Here in Thornhill we still see bidding wars on every house where a combination of location, condition and price makes sense. Home Prices are driven by the lack of inventory. Buyers (who are mostly first time buyers or people who want to upgrade their existing condo to a house) have no choice but competing with 3, 4 or sometimes even 8 other offers.