Real estate frenzy stressful for buyers, but also sellers: survey

Angus Reid’s Housing Pain Index looks at the Happy, Comfortable, Uncomfortable and Miserable as a real estate market “on steroids” divides Canadian buyers.

Article content

Lower Mainland housing sales smashed records in March, but some realtors said they are starting to see buyer fatigue as bidding wars push prices way over asking.

Greater Vancouver home sales showed no signs of slowing with March sales hitting 5,708, up by more than 53 per cent from February and 126 per cent over March 2020. It’s a record high and is 72 per cent above the 10-year March average. The Fraser Valley also experienced a record for March with 3,329 sales.

There is still unprecedented demand, said real estate agent Paul Toffoli.

“It varies, but sellers’ expectations are that they are going to get record prices for their properties, and for the most part, that is happening,” he said.

An Angus Reid Institute survey released Wednesday includes a housing pain index that gauges how “boiling housing markets” are affecting those who want to buy.

Of those surveyed in Vancouver, 26 per cent fell into the index’s “miserable” category, those who would like to buy, but can’t afford it. This number was lower than the 31 per cent in Calgary, 28 per cent in Edmonton and 31 per cent in Halifax as “the housing crunch is now spread across the country.”

Article content

Still, Vancouver real estate agents say aggressive bidding and multiple offers leading to high sale prices are finally wearing down buyers who can’t compete.

Vancouver real estate agent Alex Yao said he is starting to see some signs of “buyer fatigue” now compared to the first quarter of the year when “things were selling at prices we couldn’t even calculate” as some houses sold for hundreds of thousands of dollars over their asking price.

“Sellers are confident, but I am seeing some sellers, they may be a little overconfident” in setting their price too high, he said. “It’s a seller’s market, but buyers aren’t stupid.”

And it can even sometimes be dicey for sellers.

Yao heard one case about sellers who “got a really great offer.” In the end, he said, the deal fell through because the banks couldn’t appraise the home at such a high price.

“It’s not just a matter of ‘we’ll pay $100,000 over the asking price.’ The banks have to calculate a value because they are representing the lenders,” he said.

“But if you’re risk averse (as a buyer), it’s hard to get anything. It’s kind of like a double-edged sword, unfortunately.”

Meanwhile, the Angus Reid poll has found 40 per cent of Canadians hope housing prices will continue rising, while 39 per cent hope for a fall.

“If you are seller, you want them to go up. If you are a buyer, you want them to go down,” quipped Toffoli.

The Angus Reid survey found 22 per cent of owners in Canada say that they hope prices fall significantly, or by more than 30 per cent, despite what could be a large hit to the values of their own properties. For B.C. and Ontario, where home prices are highest, the figure was higher at 28 per cent of owners.

The rocketing market is prompting investors and economists to talk about what can temper the frenzy, including interest rate increases, changes to how bids are handled, and tweaks to the capital gains tax system.

When it comes to bigger picture attitudes, “people are happy for things to stay level. They generally don’t want to see huge price increases. Separately, people who are homeowners and plan all their lives to own their home and use it as part of their retirement don’t want radical intervention that is going to wreck 30 years of planning.”

jlee-young@postmedia.com