Toronto and Vancouver are Canada's big insane housing markets. There are smaller tech communities in Ottawa, Waterloo, and Montreal, and those cities have normal housing markets.
Housing in Toronto goes up 2k a week. The average price is over 1 million. Unless you inherit Grandmas house, you aren't buying shit on your salary in Toronto. The crisis is now spilling over to all of Ontario. I don't even know what you have to bring home after taxes to save up for a down payment. Most houses are well over 1 million. The house I bought in 2005 for $440k could fetch around 1.2 million today with multiple bids and I guarantee that it will be torn down so a new home can be built on the lot. A new home in my area goes for 2.5 plus million and they can't build them fast enough.
Another important thing the article didn't mention is that the Toronto house price bubble is popping pretty hard[1], which is making it a very attractive city to settle down in, especially considering its consistently high quality of life scores (e.g. in the Mercer survey).
Toronto went through an insane boom, yes, but there was a period in I think the 90’s that was very quiet for property values, so some of it may have been pent-up demand.
And now they’re building like crazy, with people leaving in droves. Hopefully that’ll depress prices long-term.
Interesting article considering Toronto's housing market is rolling over in a bad way.
In fact the average detached house in the jewel of the GTA is changing hands for 12% less than in the Spring of last year and a crispy 25.6% under what it commanded the previous year.
Housing in the Toronto area has been even more insane than usual the last few months. Houses an hour away from downtown that were selling for ~850k in November 2021 were selling for $1.05M in January and February.
My friend likes to say, Toronto housing prices could collapse by 50% and my $400k dollar house in 2005 will still be worth over a million. I don't think there are a lot of folks that realize how much some areas of Toronto have increased over the last 15 years. It is not uncommon to have the a buyer from Asia purchase a house for 200-300k over asking and not even move in, or the buyer is a Chinese UoT Student and buys a 1.8 million dollar house. It is beyond insanity and even a crash won't bring it back to reality.
I don't think there are any US Cities where the price of a house or condo doubled to tripled during the pandemic. There is no where in NA where the price of a house is rising at approx 2k a week, The average price of a house in Toronto is predicted to rise by 100k this year. It isn't just Toronto anymore, actually Toronto is super affordable. The prices across the province especially in areas outside of Toronto that have been historically low have sky rocketed. King Township average price is like 2.6 million.
Toronto's property market is insane. I am still seeing condos (e.g. Gibson near North York center) being priced at 600K+ for 1+1 and larger units well over 1 million dollars. Not sure who can afford this.
Places as far as Vaughan and Milton are expensive. We're talking decent detached houses (slightly above starter home) for over 1 million.
While yes, there is a serious bubble going on here in Toronto, it's also important to note the complex causes.
Canada has something like 240,000 immigrants per year, and half of them come to the Toronto region- or 10,000 people per month. Then you add in the thousands of Canadians who are moving to the city as small towns and suburbs stop being attractive. There's a greatly increased demand for housing here.
But supply is tricky. Toronto is full, land-usage-wise. There's something like two small parcels left (Downsview Park and I forget the other place) where there is honest-to-goodness undeveloped land. Apart from that, all new homes are in the suburb cities around Toronto.
This means all new housing supply in the city is from building up and other densification- which is moving too slowly. The suburb cities are also growing like mad, but the infrastructure to support all that growth isn't there, causing smaller price booms nearby any Go-train station.
But that's just the start. High demand, low supply caused housing prices to rise- leading to speculators buying second homes to flip, which shrinks the supply. It leads to people buying homes they don't want, at prices they can barely afford, because they plan to sell it in 3 years for a profit. The bubble inflates.
So why pop now? Ontario passed laws saying foreign buyers have to pay an additional 15% tax. And foreign buyers were a large chunk of sales. The latest numbers say sales are down something like 50% or more. Prices will start to sink soon.
When the Bank of Canada finally raises interest rates to prevent total catastrophe on the exchange rate, things will really get wild. In Canada, most mortgages have to be renegotiated every few years- how many of them are going to have homes worth well less than their mortgage with rates so high they can't afford to make payments? That leads to a 2008-USA style pop.
It's going to be a bumpy ride...
Edit: also worth noting, this is just Toronto. Vancouver has some similar dynamics. The rest of Canada may not have a housing bubble at all- they'll just have to deal with the economic fallout of this mess.
The housing market is delusional in the US but it's even crazier here in Canada. We never had the 2008 correction that the US had, and things just continued to climb. In southern Ontario housing prices are so out of wack of what earning potential is that it just boggles the mind.
I thought the COVID crisis would blow this all up, but it hasn't. In fact rural land values keep climbing because of wealthy Torontonians now seeking to have cottages and the like outside of the city.
I don't even know what to say about it at this point. Admittedly the economic situation isn't as dire here because the gov't has spent freely to help keep people afloat, but it just seems so irrational to me that housing prices continue to go up at almost 10% a year when the economic fundamentals are so messed up.
It's not just London, it's everywhere. Every successful first-world major city has this crazy housing price thing happening. Toronto is the same, as is Vancouver, and I'm sure Americans can list more than a few towns with freakish condo markets.
I generally agree with you, but I just want to point out that Toronto's housing market is anything but depressed right now. Houses are regularly selling for a few 100K above list price. See for instance http://fmlistings.tumblr.com/.
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