Toronto's 2017 housing bubble hurt consumers and worsened affordability, with some areas affected far more significantly than others.
Elsewhere: Canadian housing starts slowed in March, can New York City save it's public housing and housing incentives fail to ease Sydney's affordability crisis.
Toronto’s housing bubble cost sellers $136 million: Report (Toronto Star)
John Pasalis, president of Toronto’s Realosophy brokerage, manually tracked 866 home listings (excluding condos) that sold in the Toronto area in 2017 and then appeared back on the market by the same seller by the first quarter of this year.
Toronto brokerage Realosophy Realty Inc. found 16.5 per cent of low-rise houses in the Greater Toronto Area were purchased by investors during the first quarter of 2017, the peak of the bubble. In 2012, investors accounted for only 4.8 per cent of low-rise purchases.
“The condo segment is probably the one thing that’s potentially going to cause some vulnerability in the market in Toronto,” Pasalis said. “But everyone’s been calling for a condo crash in Toronto for 10 years — it’s hard to predict.”
Twitter critics highlight casualties of Toronto’s slow real estate market (The Globe and Mail)
“This is cherry picking the extremes,” says John Pasalis, president of Realosophy Real Estate Inc., who expects to see fewer of these examples crop up the further we get away from the period of peak price drops that happened in the summer of 2017. “The floor fell out in a number of weeks ... at this point it’s a history lesson because prices have been pretty stable lately.”
Infrastructure is the foundation on which the success of a city is built. And any resident of the GTA, and anybody in the market for a new home, should care about infrastructure. We take it for granted when it is there, but we really feel the pinch when it is not.
Canadian housing starts slowed in March, CMHC reports (Canadian Press)
The pace of housing starts slowed in March as the rate of new work on buildings such as apartments, townhouses and condominiums decreased, Canada Mortgage and Housing Corp. said Tuesday.
In some ways it would be easier to plan if we really knew for sure whether Canadian home prices were about to fall off a cliff as so many people keep predicting. But of course that's not how markets work. A difference of opinion about the future is one of the reasons why there is always a buyer for something you are anxious to unload.
"It's taken us a long time to get here, it's taken decades of ignoring the system," he said, adding it would take a least 10 years of government commitments to resolve the problem. "That is something that is difficult to do because it's expensive and it doesn't show immediate results."
What has caused this race to the bottom? Economists might argue that the decline in real income in the UK, and the squeeze felt by middle-income earners, is responsible. But this is only part of the reason. Another force might be at work: the fall in home ownership.
April 13, 2018Week In Review |