Bidding War Insanity Edition : Weekend Reading

Average Bidding Prices in Canada

House price bidding across the country continues to soar. The average price for a home in Canada reached $695,697 in April, up an incredible 41.9% year-over-year. Ontario is driving the majority of those gains, as the province’s average price rose 46% during the same period.

Would-be homebuyers are getting into bidding wars and paying several hundred thousand dollars over the asking price to get their desired home. Insanity.

Reader’s Choice over bidding prices

A reader bid $250,000 over the list price on the above home, but ultimately was not even close after multiple bids came in at an even higher price. The same reader put in two offers on different properties and lost in a bidding war. Houses are selling in just a few days.

“We find ourselves in a market where buying first seems to be the only path, because if I sold first, then tried to buy, I could be homeless! It is so crazy…makes us wonder if we want to play.”

Related: Real Estate, Wealth Management, and Related Advice

Not every region in Canada is experiencing a real estate boom, mind you. The latest episode of the Globe & Mail’s Stress Test podcast featured a 30-something who moved from Toronto to Saint John and bought a house for $99,000.

Comparison of bidding Price Change

Prices in my area (Lethbridge, Alta) are up 14% year-over-year but with an average price of $317,222 it’s still well below the national average. Here’s a look at how the provinces compare in average home price and year-over-year change:

 

 

Area	April 2021	April 2020	% Change
Canada	$695,657	$490,082	41.90%
BC	$943,845	$733,330	28.70%
Alberta	$439,319	$362,851	21.10%
Saskatchewan	$283,900	$256,900	10.50%
Manitoba	$335,812	$295,518	13.60%
Ontario	$869,788	$595,825	46.00%
Quebec	$448,601	$338,384	32.60%
New Brunswick	$257,649	$182,368	41.30%
Nova Scotia	$372,534	$267,110	39.50%
PEI	$342631	$239,070	43.30%
Newfoundland	$286,900	$265,200	8.20%

Regulators are concerned and will introduce a new stress test on June 1st for uninsured mortgages where the borrower must be able to afford mortgage payments at 5.25% (up from the current 4.79%). The federal government will follow suit with the same minimum qualifying rate on insured mortgages.

I’m curious if other readers have been caught up in any crazy bidding wars, either as a buyer or seller. Let us know in the comments.

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