Vancouver Real Estate Agent  Dan Miller & www.GreaterVancouverHomes.ca

'Outrageous and borderline bizarre'

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.

Property markets in other large cities, such as Vancouver and Calgary, are undergoing similar pricing shocks, he said.

“We’re looking at this through a prism of our expectations growing up in Canada in the 1950s, '60s and '70s, when part of the Canadian dream was that you would own your own single-family home," Hlinka said. "But as Canada matures, we’re going to be looking at a new reality, where that may be out of reach. And I don’t think you can turn back the clock.” Toronto real estate mogul Brad Lamb said Canadians' home-buying expectations have to change, but he doesn't believe that overseas investors are to blame.

The scarcity of the product — in this case, single detached homes — is key, he said. And as the Toronto population grows and land available for new houses becomes scarce, the competition for these homes will become even more intense.

Condos are the alternative. Already, they're the norm for families wanting to live in the central cores of cities such as New York and Chicago, said Lamb, who is a condo developer.It's an illusion for people to think they can live in downtown Toronto in a detached home and not be wealthy," Lamb said. "Ordinary people can't live in central London or central Paris or central New York."If you want to live in central Toronto, you're going to have to live in a condo or be a millionaire. That's the reality. ... It's not a bad thing. It's the way cities evolve."

Inflated prices, such as the price fetched by the Willowdale bungalow, do make it difficult for ordinary Canadians to get into the market, no matter who buys the house, said Steve Matthews, a Re/Max agent in north Toronto."It skews the market. How does Joe Normal compete with that" [price], said Matthews."Now, the person who lives next door and the person who lives down the street think they should get that price, too. It also generates resentment because it makes it tougher for everyone — buyers, agents, banks — so there is a ripple effect that goes beyond the immediate sale."