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The single best deal in Toronto real estate

The home at 21 Seneca Ave., Algonquin Island.

A listing for a house on Algonquin Island shows the vastly different housing market between the islands and the mainland

In an overheated Toronto real estate market where the cost of an average home is around the $1-million mark, there is one incredible bargain: a tumble down lakefront house going for only $14,276. The long-term lease for the land is extra, but it is only $71,830.

The home is in one of Toronto's most sought-after neighbourhoods, on the Toronto Islands, just a 10-minute ferry ride from the downtown. It lies right on the water, boasting a clear view of the city's skyline.

But as with every deal that seems almost too good to be true, there's a catch: Only a small, predetermined group of 150 people will be able to make an offer on the house, the price of which has been fixed and is non-negotiable.

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Homes for sale on the Islands aren't subject to Toronto's overheated bidding wars. Instead, their price is determined under an archaic system set up by the Ontario government in the mid 1990s to prevent island residents from making undue profits by selling their homes, which are built on publicly owned land next to a city park. While residents own their houses, the land is under a long-term lease that runs until December, 2092.

Housing on the islands is so inexpensive because prices are based on the original cost of the home, minus any depreciation for wear and tear. The sale is organized by the Toronto Islands Residential Community Trust Corp. (TIRCTC), the provincial body that sets resale values.

The seller admits the home needs work; visitors to a recent open house were not allowed to step through the door. An inspection found structural and electrical elements were not up to code.

Life on the islands is a unique experience. The 700 or so islanders have formed a tight-knit, first-name-basis community. But with no grocery store and a school that runs only to Grade 6, island residents are used to making frequent trips to the city. In the winter, when the luscious green parkland and sweeping beaches give way to snowy isolation, these trips can be a chore, especially since cars are not permitted on the islands.

Prospective buyers of the home at 21 Seneca Ave. must be on a list maintained by the trust. The list contains up to 500 names, all of whom must pay an annual fee of $50 to maintain their place. Those at the top of the list get first crack to make offers on homes. The current sale is only open to the first 150 people on the list and is expected to go fast. Since the price is non-negotiable, the person at the top of the list is simply given the choice to buy or pass. None of the names on the list have been made public. The deadline for submitting an offer is May 16.

Representatives from the TIRCTC declined to comment, as did the most recent appraiser to have reviewed the house for the trust.

The $86,106 total price for the house and lease is a far cry from the average cost of a detached home in Toronto area, estimated at $1.2-million in April by the Toronto Real Estate Board.

The house itself is in a state of disrepair, to the point where visitors to a recent open house were not allowed to step through the door.

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The 927-square-foot, two-bedroom, one bathroom house sits on a 5,000-square-foot lot. A walk around the property reveals slanted walls and a roof that is sagging in some places. Chipped white paint on the wooden exterior panelling completes the ramshackle look.

An inspection commissioned by the trust found various instances of structural and electrical work that was not up to code in the house, which was built in 1908 but has had some renovations since then.

But it wasn't all bad. Pictures of the interior of the house contained in the appraisal report show it has a cozy cottage-like ambience, with bright white walls.

Thecurrent sale is only open to the first 150 people on a list of prospective buyers that have to apply for years in advance.

Megan Cridland, an island resident who has been in the house, says she thinks it is still livable, at least until it starts to get cold. She says the house is comfortable, but has a temperamental furnace.

In 2015, an even more dilapidated house in the Beaches area of Toronto sold for more than $1 million. That house reportedly had no hydro or running water. That the island house should be so much cheaper is indicative of the very different housing markets between the Islands and mainland Toronto.

Like the Beaches sale, it is likely that the eventual buyer of the island home will demolish the house and build another.

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Ms. Cridland says she was surprised to hear that the price is so low.

"I was shocked," she said. "It's unbelievable, that price."

Another island house, this one in better condition, is currently also being sold. The price is $239,127 including the lease, also a bargain by current Toronto standards.

For those hoping to get on the list, it isn't easy. Between 2013 and 2014 – the last time the list was open to new applicants – 266 people vied for the 32 available spots.

And being on the list does not mean that you will be able to buy a home. The two to three houses that become available each year are typically snapped up by those in the top 100 of the list.

If the current rate of sale continues, it will take 167 to 250 years for all of those on the list to get homes.

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