“In the major city centres, those in Toronto are the most likely to under-price their home to spur competition (25 per cent), followed by Vancouver and Calgary (17 per cent and 12 per cent respectively),” according to the BMO Home Buying Report released Tuesday. In fact, “15 per cent of owners would be willing to under-price their home to spark a bidding war.”
Those numbers are likely down from the same time last year when that riskier ploy was plied from one end of Canada to the next as buyers sought to cast as wide a net for buyers as possible. The hope was they could play one buyer off the other and drive up prices well above market value.
Some investors had hoped that strategy would go the way of the dodo bird as the number of potential buyers fell and the risk of actually selling below asking increased. Not necessarily so.
Underpricing may, in fact, continue to thrive in multifamily property situations, one analyst told CREW online, pointing to the scarcity of properties for sale and growing buyer demand, encouraged by rock-bottom vacancy rates.
“I think we’ll continue to see that strategy being used in the GTA because sellers of tri- and four-plexes can get away with it,” said Martel Armstrong, a Mississauga investor. “That’s too bad for those of us looking to buy.”
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That, at least, is the warning of a new poll, suggesting investors will continue to confront multiple-bid situations, even in a slower market.