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The listing is part of a new trend in homes being marketed to buyers who can afford to pay and wait for their custom dream home
A two-bedroom bungalow listed on the Toronto real estate market for $1.788 million is being sold as a tear-down opportunity, ideal for buyers ready to fork over another $800,000 to $1 million to build their “dream home.”
The listing for 33 Elwood comes complete with blueprints and building permits for the slick modern home that could take its place near the coveted Eglinton Park area.
The house in its current condition is livable but not exactly desirable. Listing agent Allen Naseri of Royal LePage Terrequity Realty says buyers would likely make minor updates to make it suitable. But his listing is selling the possibility, a vision rather than a product, which is becoming more and more common in the Toronto real estate market.
An artist’s rendering of a dream home built at 33 Elwood
“We are marketing to the end users,” says Naseri. He explains that the property at 33 Elwood isn’t meant for builders to come in, flip and sell to buyers looking for a ready-made home with all the fixings. This, he explains, is for those who can afford to pay and wait “nine months to a year” for the home they can mould to their taste. “They are the ones that are custom building it.” The listing includes artist renderings as seen above of what is possible for the new build.
Another modest two-bedroom bungalow in the Swansea neighbourhood, pictured in a state of disrepair, is listed on Toronto real estate sites for nearly $1.2 million, proposing builders come in and turn it into a “dream home.”
Meanwhile a listing in Scarborough’s West Hill proposes the purchase of a two-bedroom bungalow for $2.2 million, with blueprints for a lot severance and the construction of two new custom homes.
Toronto real estate broker Odeen Eccleston of WE Realty says that the new trend is a marketing strategy that was mainly used in the past for homes in desirable neighbourhoods being sold after the owners passed.
“They were one of the last little bungalows in a developing neighbourhood,” says Eccleston. “A way to market them was like, ‘Listen. This is in its original condition because it was owned by the original owners since the 1930s or 40. It has this great potential.’ Now that strategy is being almost overused.”
The listings are also being sold at a price that appear to speculate their top dollar value in today’s market. In the case of 33 Elwood, the final price tag after waiting a year and building a modern new home will come it at around $2.6 to $2.8 million, which is roughly the price of nearby homes in the area.
Naseri estimates that a modern build in the area could nab $3 million. After a brand new build, a Swansea property would come in at nearly $2.2 million, which is not far from the listing price of a home the neighbouring High Park area. Meanwhile, the selling agent of the $2.2 million bungalow in West Hill estimated in March that after spending a couple million to build two new homes (a $4.2 million investment) the buyer could fetch $2.6 to $2.7 million for each.
“In the past, you had to incentivize people to want to buy the derelict house on the street,” says Eccleston. “And the incentive was that you were going to get it for a deal. But in all fairness to sellers and to sellers’ agents, if they’re realizing that people are going to buy something for pretty much any price, they’re in the business of getting their client the most money. That’s why I said the onus is on the buyer and the buyer’s agent to do your due diligence and not overpay.”
Eccleston says that agents allowing clients to overpay is part of the reason the prices in the Toronto real estate market are so out of hand. But she also notes that the market has been cooling down and prices have been levelling off since March, when people were in lockdown and experiencing a sense of FOMO for missing out on larger properties as prices continued to climb.
“It was just like a recipe for a scorching prices,” says Eccleston, who says that people are just tired and hoping to enjoy their outdoor time during these months. “So we’re seeing a little bit less interest. That’s reflected in the prices for sure.”