If you've followed along with my past real estate articles, I previously wrote about successfully finding a home in Toronto after a 32-month search, house bidding wars in Toronto, and posed the question: "Is this the year that the Toronto housing market will deflate?" My family and I have since moved into our resale Toronto home, and I'm no longer a buyer or seller in the Toronto real estate game. One month has since passed, and we're settling in nicely.

Although we made it out of the Toronto housing market alive, I remain fascinated by this manic housing phenomena. Buyers are hard-pressed to find a single family home in the great city for under $850,000, whereas sellers have a plethora of buyers from which to choose. Bidding wars abound, and only one family will be crowned winner of each house.

This is a fantastic time for realtors who earn a living by commissions. My real estate agent earned half of 5 per cent on the sale of my own home, which equated to $25,000 split with the purchasing agent. She also earned a more generous commission on the purchase of our new family home: $44,000 split with the selling agent. That works out to $34,500 in commissions from the purchase and sale of my combined properties! Some of those monies did get divvied up with the brokerage or were disbursed elsewhere.

With houses selling like hotcakes in the great city, it's no wonder that the most successful realtors are earning seven figures. Which brings me to my next point: in Toronto and the GTA, quite a few home purchase and sales incentives are being offered by realtors, as well as new home builders. It's just too lucrative of an opportunity to pass up.

For our house-warming, my own realtor let my husband and I pick out the stainless steel refrigerator and dishwasher of our choice. I thought it was a very decent gesture, considering the large commission she had earned from the purchase and sale of our properties. It meant even more to us, as our new home didn't have any fridge to speak of, and the dishwasher that came with the house was broken.

It's not a new concept for builders to offer incentives in the form of upgrades to potential buyers -- this has been around for eons. Just Google it, and you'll see "free" upgrades to the tune of $25,000 being offered in Toronto and the GTA. Typical "free" upgrades may include choice of hardwood floors throughout the new domicile, a modern kitchen with granite counters and upgraded cabinets, or a fully finished basement.

However, I've been astounded by other incentives that have recently popped up in the Toronto real estate market. For example, Kylemore Communities has been offering $35,000 towards any new BMW, with a purchase of one of their specific condo developments. I drove by one of their big road-side signs earlier this year advertising the offer, and noted to myself that they had really upped their game. Can you say that everyone and his neighbour drive a BMW in your area? In this case, it would be true!

Shortly after I moved into my new home last month, I was floored by a real estate flyer that was delivered to me. It read: "Buy or Sell a Home, Get a New Car!" The advertisement went on to qualify the offer: if the sale and combined purchase of your real estate property total $2 million or more, you receive a "free" 2013 Honda Civic. If the proceeds total $1.2 to $1.9 million, get a "free" 2013 Nissan Versa (the total proceeds of my old and new homes would have allowed me to qualify for this offer)!

The same realtor's ad offered a $7,000 Yorkdale Mall shopping spree, when the combined purchase and sales proceeds run from $600,000 to $1.19 million. The "poor man" can enjoy a $3,000 Apple Store gift card, with proceeds from $300,000 to $599,000. If you'd like to read the actual ad, I've included it in this article.

I'm not sure when this insanity will end, but according to TD Canada's Quarterly Economic Forecast, dated September 25, 2013, they predict "gradual cooling on tap for (Canadian) housing," by the end of 2014. Elevated household indebtedness and higher interest rates are cited as reasons why the housing market will slow next year.

In the same economic forecast, TD Canada goes on to say that the "Canadian housing market is roughly 8 per cent overvalued based on fundamentals." Hmm, only 8 per cent they say? The same house that I could have purchased for $650,000 in November 2010, is now over $850,000...that's 30.7 per cent overvalued in my books! What real kind of correction can we expect?

As I write, 4.09 per cent is available on the Internet for a five-year fixed/closed mortgage. Looking back to January 2012, Bank of Montreal shook the market by offering a 2.99 per cent low rate five-year fixed mortgage, which was offered for a limited time. In contrast, in August 2013 (just last month!) I had secured a percentage rate in the low 3s on a five-year fixed/closed mortgage -- the rate has risen close to 1 per cent in only one month's time!

The Toronto real estate market has nowhere to go but down, according to similar historical models. Although this would be bad news for realtors and builders alike, it would welcome back an age of empowerment for buyers.

And although house purchase incentives like "free" cars may go to the wayside when this happens, buyers will be able to rejoice once again with lower house prices, and still very decent mortgage rates (hey, I paid 6.25 per cent on a five-year fixed/closed rate in 1998 and was delighted with it!) I know that some predict a more "even" real estate terrain, where buyers and sellers are on more equal footing -- and I sincerely wish for this.

What do you think of the current real estate situation in Toronto and the GTA? Do you think the housing market will continue growing, remain stable, or that the bubble will burst?

I welcome your comments, and I do read them all and reply.

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