Mediaboss Marketing

Overseas investors are snapping up properties in Canada's largest cities, driving up prices and pushing ordinary Canadians out of the housing market, observers say.

Real estate experts call it the "new reality," and the high price paid for a north Toronto bungalow is the latest evidence.

This month, the three-bedroom bungalow, circa the 1960s and without much updating, sold for $421,800 over the asking price, creating a buzz among agents and other buyers.

Located in Willowdale, where similar detached houses typically sell for just short of $900,000, the bungalow at 300 Dudley Ave. was listed at $759,000.

The winning bid of $1,180,800 came from a university student whose parents live in China and own a business in San Francisco. There were four other bids of more than $1 million.

"The initial response was quite vociferous," said Michael Adelson, a Re/Max agent who represented the seller and received several phone calls about the deal after it was done.

"There's a lot of anger among Canadians who earn money here that they've been priced out of the market. There is some degree of anxiety about how people are going to compete with these hyper-inflated prices."

Adelson declined to discuss the specifics of the Willowdale deal, citing client confidentiality.

But CBC business commentator Michael Hlinka called the deal "outrageous and borderline bizarre."

The strong reaction to the price likely stems from how it changes the vision of affordability for average Canadians, he said.

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Offshore bids price Canadians out of housing market