Imagine you’ve just won an $8.5-million mansion.
It’s a dream property, with five spacious bedrooms, four luxurious bathrooms, two additional half bathrooms, and a marble countertop kitchen — all in a newly renovated, ultra-modern home featuring the work of celebrity interior designer Brian Gluckstein.
But then a shock: it turns out your new home is worth only half of its advertised value.
That’s what happened to the recent winner of an Oakville home in this year’s Princess Margaret Home Lottery.
The Princess Margaret Cancer Foundation announced the winner of the home in the spring.
The prize winner — who won a $500,000 cash prize along with the mansion — then put the home up for sale in June, which eventually sold for $4.3 million in November, according to the property’s MLS listing.
Oakville-area realtors the Star spoke to said the lower selling price may be partly due to an overly optimistic valuation as well as the GTA’s sluggish luxury market.
A spokesperson for the Princess Margaret Cancer Foundation said the homes are independently appraised and offered at fair market value.
“Homes included as prizes in the Princess Margaret Home Lottery are recommended to us by a registered lottery service provider,” the spokesperson said in a statement to the Star.
“These appraisals are conducted by independent third-party professionals and are an integral part of the real estate prize valuation process,” the spokesperson said, adding that appraisal includes HST, furnishings and landscaping.
The fact that the home sold for less than its advertised value could be due to market values fluctuating based on broader market conditions and “any changes made to a property once under new ownership,” the spokesperson said.
“We submit all required documentation to the Alcohol and Gaming Commission of Ontario (AGCO) to ensure we adhere to all regulations, terms, and conditions,” the spokesperson said. “The AGCO requires that we include the retail value of each prize.”
Princess Margaret Cancer Foundation would not comment on when the home was appraised.
The Star reached out to the seller’s agents to try and get in touch with the owner of the property, but Murray McKeage, sales representative at Goodale Miller Team, wrote in an email to the Star that the seller and the buyer did not wish to comment.
Princess Margaret prize mansions can sell for less than the advertised value because they add in furniture, finishings, and designer costs, which can “bump the value up,” said Cory Martin, broker and cofounder Oakville-based real estate agency Martin Group.
Martin said some winners of past homes have sold them “right away” for less than what Princess Margaret valued them at.
In 2012, for instance, the Prince Margaret lottery home was valued at $4.3 million when it was awarded in May, but went on the market for only $2.9 million around a year later.
“If you look at sales in the Morrison neighbourhood, where this home is, for the square footage of 4,500 square feet, it ($4.3 million) would be the price you’d expect,” Martin said, adding that other similar properties in the area are selling in that price range.
Typically, winners of the home prize sell the property, Martin said, because they are on the hook for property taxes — which would likely sit in the $20,000 range for the Oakville home.
“It may not make sense for most people to uproot the family or change jobs, and they may not have the income to pay the property taxes on the home, right?”
Dan Cooper, CEO for Oakville-based real estate agency Dan Cooper Group, said it couldn’t have been a “worse time to sell a luxury home.”
In June, inventory in Oakville peaked to 1,500 properties on the market. Typically, it’s around 450 to 500 listings, Cooper said.
“That shows you we had three times as much inventory as we’re used to,” he added.
Since the February 2022 price peak, the average home price has dropped 30 per cent in Oakville, and the high end of the market is down 25 per cent, indicating that the luxury market isn’t immune to the uncertain economic landscape and tanking consumer confidence, he said. Even if the property sold during the peak, it likely wouldn’t hit a $7 million price tag, he added.
Cooper said he would have expected the home to sell for closer to $4.8 million, but suspects the owner just wanted to “enjoy the free money and move on.”
