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Tuesday, July 28, 2020

Here's why this tiny Toronto house might actually be worth $1 million

One very tiny house near Little Italy that was newly listed for nearly $1 million has Toronto freaking out about the city's real estate market — but it seems the home may not be so ridiculously priced after all.

A listing for a sad-looking two bedroom, one bathroom bungalow on an overgrown lot at 300 Euclid Avenue has gotten a shocking amount of attention in recent days according to the agent who is selling it, Chun Man Alan Ng at Envoy Capitol Realty. Ng adds the price is actually quite a steal for the lot despite all the talk.

"People are on two spectrums: those who think it's very expensive and those who think it's very cheap," Ng says. "For people that don’t know real estate, it seems expensive, but it's not. It's just about land value and future potential."

This may be why few details are given about the house itself in its online listing, which describes it as a "rare detached bungalow located in the heart of Toronto" on "a great size lot with two car garage at rear."

"Loads of potential and great investment," the ad goads potential buyers.

The property, which is more than 20 feet by 120 feet, is actually extremely coveted by virtue of the fact that the home on it is not hard to demolish for anyone who wants to build in such a desirable downtown neighbourhood.

"It's quite an attraction for people who want to build a house... detached is not very common," Ng says, adding that "if the house was nice, people are not going to want to tear it down" due to the hassle of permits, additional labour, and added cost of both the work to do so and the property itself in the first place.

Re/max Hallmark sales representative Derek Ladouceur agrees, stating that in his opinion, the house will likely be sold to someone who is going to knock down the current structure, build a more desirable one and resell it for a huge profit — or build their dream home.

"Let’s say it sells for 1.3 million, and you build a house for $600,000 to $700,000 — you’re still in the money but close to a million dollars based on recent sales in the area," he says, citing a comparable home in the area that recently sold for a staggering $3.15 million.

"When you show a little house in downtown Toronto, of course it looks expensive and overpriced. But you’re paying for the land and a two-car garage, which is unheard of for a small price like that."

So while the listing may be shocking for those of us who don't have a million dollars to invest in our ideal residence, let alone a shack on an investment property, it seems that it's a completely reasonable price for developers or those residents with more cash to throw around.

"It's going to sell for over a million... I absolutely think it's a great deal," Ladouceur says.

Ng, meanwhile, is focusing on an offer that is slated to come in Thursday — he expects the home will be sold by Friday.

by Becky Robertson via blogTO

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