Bidding war no more: How to make an offer in Canada’s cooling housing market

Housing markets in Canada are cooling down, giving some buyers a bit more negotiating power but complicating the question of how to bid on a home.

The apparent cooling in Canada’s housing market is leaving many buyers and sellers alike confused about how to price and bid on homes in the normally fervent spring market, real estate brokers say.

Those who spoke to Global News said the new market is resulting in negotiation power swinging back into the hands of buyers in many cases.

Nasma Ali, broker and founder of One Group Real Estate in Toronto, said the difference between the mid-winter market — before the Bank of Canada started hiking interest rates — and today is “day and night.”

Back in January and February, properties across Ontario, be they cottages or in the urban core, were all seeing multiple offers and going well above asking, she recalled in an interview with Global News.

“Every single house that went on the market was expecting and was getting multiple offers, really high demand,” Ali said.

The strategy then saw sellers accept offers on a single date, playing on the expectation that a bidding war would drive up the end price. Buyers had little leverage here, she noted, as sellers were under no pressure to accept the first offer they received.

“Why would they take a bully (offer) when they feel like they could get, like, an astronomical, magical number on offer night?”

The Toronto Regional Real Estate Board last week reported the number of April sales in the market dropped by about 41 per cent from the same month last year and 27 per cent from March.