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Toronto-area house hunters who are lamenting the thin supply of listings in the real estate market might consider a meander through Willowdale.

The area near Yonge Street and Sheppard Avenue recently had 42 houses for sale on one wintery day when real estate agent Andre Kutyan of Harvey Kalles Real Estate Ltd. tallied the property listings.

For the purposes of his survey, Mr. Kutyan had narrowed his search to two-storey detached houses with a garage and an asking price between $2-million and $3-million in the area north of Highway 401 that mainly encompasses Willowdale East and West, and West Lansing.

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The average asking price in his sample was $2,671,188.

Mr. Kutyan figures a buyer with a budget of $2.5-million, give or take, has a good opportunity to snag a deal.

“Anybody who’s interested in that area right now can go shopping and see who’s hungry.”

The area was hugely popular in the middle of the 20th century when families purchased 1960s-era bungalows on large, leafy lots. In recent years, builders have torn down vintage homes and divided the lots to erect two luxury houses.

When he revised his search to look for the same type of detached house in the area south of Highway 401 down to Eglinton Avenue West, Mr. Kutyan found 27 listings with an average asking price of $2,695,848.

Mr. Kutyan chose Highway 401 as his dividing line because it’s a handy geographical and psychological barrier, he says.

Not only were the listings more plentiful north of the 401, the properties typically take longer to sell. In the area he surveyed, the average number of days on market is 46. South of the 401, average days on market is 36 for his sample group. (And that number doesn’t take into account that many of the properties in both areas have been taken down and relisted many times).

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“There’s a stark difference in what’s happening with the sales numbers.”

In all of 2018, 51 properties that met Mr. Kutyan’s criteria changed hands in the Willowdale sample and the average sale price was $2,727,330.

At that pace, it would take 10 months to sell the 42 houses for sale – if no new supply arrives on the market.

In the area he surveyed south of Highway 401, Mr. Kutyan found 120 sales in 2018 that met his search criteria and the average sale price was $2,490,370.

If that pace of sales keeps up, the area – which includes such neighbourhoods as Bedford Park, Ledbury Park and Lawrence Park – has 2.7 months of inventory.

Mr. Kutyan says the gap between 10 months of inventory and 2.7 months puts sellers on a very different footing in the two areas.

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He characterizes the tension between sellers and buyers north of Highway 401 as a stand-off.

Many of the sellers are builders who are holding out hope that the market in the Greater Toronto Area will see a strong rebound, Mr. Kutyan says. He adds that says many of them paid a hefty price for the original property, then saw the value of the land slide as they built two new houses.

“Their profit margins are being wiped out. For some of them, it’s not even about making a profit any more – it’s about mitigating their loss.”

Many potential buyers, meanwhile, are anticipating a fire sale when the developers become desperate enough.

“The buyers’ attitude is terrible – they think the sky is falling and they’re sitting on the sidelines,” he says.

The Toronto Real Estate Board (TREB) reported this week that sales in the Greater Toronto Area in February slipped 2.4 per cent from February, 2018. New listings dipped 6.2 per cent in the same period.

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The average price in the GTA remained almost flat, with a 1.6-per-cent increase to $780,397 in February from the same month last year.

TREB president Gurcharan Bhaura says a tougher stress-test on mortgage borrowing is keeping some aspiring buyers out of the market. Mr. Bhaura is calling on the federal government to look at bringing back 30-year amortizations for federally insured mortgages.

Mr. Bhaura points out that GTA real estate sales have a substantial impact on the Canadian economy.

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At Bank of Montreal, senior economist Sal Guatieri is warning that the country’s economy is stalling. Real gross domestic product rose at an annualized rate of 0.4 per cent in the fourth quarter, he notes.

Businesses have slashed spending, Mr. Guatieri says, and consumers are spending at the slowest pace since the most recent recession as higher interest rates and elevated debt levels have tamped down household credit growth.

In the Toronto real estate landscape, Mr. Kutyan thinks one reason for the different dynamics north and south of the 401 is that the Willowdale area saw a rush of money from overseas buyers in China, Iran and other countries up until early 2017.

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That influx encouraged spec builders to put up new houses as quickly as they could acquire the lots.

In April, 2017, the Ontario government introduced a 15-per-cent tax on purchases by non-resident buyers – along with other measures designed to cool the market – and sales took a tumble.

Another factors is that buyers from China faced tighter restrictions in getting money out of that country, Mr. Kutyan adds. In many cases, Canadian citizens and landed immigrants were making purchases, he says, but the money was coming from overseas.

The 905 regions of Markham and Richmond Hill have also been hurt as foreign money has dried up, he says.

“It’s going to affect the local market.”

South of the 401, he says, the market tends to have a broader mix of buyers. That combination of local and overseas buyers added stability to popular neighbourhoods.

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Meanwhile, Mr. Kutyan believes that builders who are waiting for a dramatic upswing are clinging to false hope. In order to end the stand-off, he thinks sellers need to become more realistic.

“They have this misconception that the market’s going to get better in the spring – the only thing that’s going to get better in the spring is the weather.”

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