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A bungalow at 194 Hounslow Ave. with an asking price of $1,499,000 ultimately sold for more than $2-million.

Last week Lena Preje listed a house for sale at 194 Hounslow Ave. in Willowdale with an asking price of $1,499,000.

The agent with ReMax Ultimate Realty Inc. set the asking price a bit low, hoping to generate a bidding war. Within a few hours, a bully offer came in for $2,010,000, or $511,000 above the asking price.

"Grab it and run," Ms. Preje advised the seller, who had paid $1.275-million for the house last year.

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Ms. Preje doesn't know who the buyer is but she suspects the modest two-storey house will be torn down to make way for something much grander on the 63-foot-wide corner lot. A lot of rebuilding is going on in this corner of North York near Yonge Street and Finch Avenue West.

"The market is crazy – and especially this pocket," says Ms. Preje. "Four hours and it's gone," she says of nearly every house she lists.

She also lives on Hounslow, up the street from the house that just sold. She has sold 53 houses just on Hounslow and Horsham Street, one block to the south, in the past 17 years. Today many of the buyers are from China and Iran, she says.

"Nobody knew that the market would jump like this. It's still hard for me to believe."

Many market watchers are wondering if prices in the the Greater Toronto Area will be driven even higher by overseas investors now that the government of British Columbia has abruptly announced plans to tax foreign buyers.

This week, B.C. unveiled plans to levy a 15-per-cent tax on Vancouver-area real estate purchases by foreign buyers starting Aug. 2.

The provincial government wants to slow the foreign speculation that has helped to push real estate prices up 30 per cent in Metro Vancouver in the past year.

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The province, which has only recently begun to track purchases by foreigners, found this month that one in 10 properties were purchased by people who are not citizens or permanent residents of Canada.

Toronto-Dominion Bank senior economist Michael Dolega explains that the policy is intended to help restore affordability for residents in Metro Vancouver by raising non-residents' cost of purchasing. The move may also calm the market by discouraging foreign speculation.

Since a lot of overseas investors are purchasing luxury properties, releasing steam at the top end of the market will likely allow a cooling effect to ripple all the way down the price spectrum, he adds.

Mr. Dolega says looking at the impact of the various levies imposed by other countries may give us an idea of what will happen in B.C. Measures taken in Australia, for example, temporarily slowed the market before prices resumed their upward momentum.

If foreign buyers represent five to 14 per cent of the market in Metro Vancouver, he estimates that sales may slide 15 to 20 per cent over the next three quarters. Average prices may dip five per cent in the same period, according to his models.

Even before the tax was announced, TD economists saw signs that overseas buyers were gravitating towards the less-richly-valued Toronto market. That spillover could see the Toronto market become even zanier.

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"Prices in Toronto could see some significant upside pressure in the coming months as foreigners look to new markets," he says.

Meanwhile, many market watchers are predicting that the Ontario government will have to consider a similar measure.

John Andrew, a professor at Queen's University in Kingston, Ont., calls the new tax a "dramatic and unprecedented step" in response to tremendous public pressure.

Prof. Andrew, director of the Queen's Real Estate Roundtable, adds that actually implementing the tax could be challenging as no level of government has a good system to track foreign investment, or identify the actual owner of the home.

"There have been anecdotal examples of multimillion-dollar homes being put in the names of Canadian citizens – in some cases university students – earning very low incomes, who could not possibly afford those homes," says Dr. Andrew.

Ms. Preje says many of the buyers who contact her are investors who want to rent out a property or developers who want to rebuild. She sees a mix of local and overseas buyers.

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She herself arrived in Canada as a Russian immigrant in 1990.

When she decided to launch a career in real estate a few years later, her colleagues handed her some massive directories and told her to start cold-calling homeowners.

She opened one volume and started with an address on Horsham Street. She still remembers that the owner was named Mrs. Scott.

Ms. Preje was mainly concentrating on her grammar and pronunciation because she was just learning English at the time.

"Do you want to sell your house?" Ms. Preje asked.

"As a matter of fact, I do," said Mrs. Scott.

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From that very first cold call, Ms. Preje went on to meet with the homeowner and secure the listing.

She says Moscow is a beautiful city but she feels very grateful to live in Toronto, and she knows many from around the world feel the same. Since the Brexit vote that will see Great Britain leave the European Union, she has heard from overseas buyers who are planning to shift some of the cash they would have invested in London to Toronto.

"We are very lucky people. We don't have fires, hurricanes, we don't have terrorists," she says. "It's a safe pocket."

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