Toronto lawyer Mark Weisleder said that these listings are largely responsible for the continuous inflation of housing costs in the city. The bidding wars, Weisleder explained, can cause final sale prices to grow by as much as $1 million greater than the initial listings.
“[This is] extremely stressful and essentially unfair to buyers,” Weisleder told the Financial Post.
Industry stalwarts countered that a sellers’ market calls for such strategies, especially since the last 10 months saw 40 per cent lower prices in listings and 30 per cent higher sales prices in the city.
“As a result, a significant percentage of transactions would have competing offers,” Real Estate Board of Greater Vancouver president Darcy McLeod said.
Local professionals added that encouraging bidding is a legitimate approach in Canada’s most active housing market.
“It is the listing agent’s duty to attract as much interest to their client’s [property] resulting in the best possible price,” realtor Andrew Hasman said.
An industry observer noted that the recent upswing in the phenomenon of low-ball listings—in which properties are initially registered at 5 to 10 per cent below their market value—has precipitated intense bidding wars that have led to an uncontrollable upward spiral in Vancouver real estate prices.