The GTA’s top mar­ket mavens and mav­er­icks con­gre­gated, elec­tron­i­cally this time, to duke it out over their expert pre­dic­tions for the next great rise (or fall!) in res­i­den­tial real estate. Let’s get ready to rumble!

Postc​ity​.com

At our last round­table, our experts were, again, opti­mistic about the future of Toronto real estate. Top car­riage trade real­tor Elise Kalles sug­gested that the per­ceived mar­ket slow­down was a “sea­sonal” issue, not an eco­nomic one. Sherry Cooper, exec­u­tive vice-president and chief econ­o­mist at BMO Finan­cial Group, agreed. Garth Turner, our panel’s out­spo­ken busi­ness and real estate com­men­ta­tor (and for­mer MP), had a doomier-and-gloomier out­look: “The econ­omy is not eter­nal,” he pro­claimed, “it seems clear we’re in a period of defla­tion­ary angst.”

POST: Where are we today?

Sherry Cooper: The year 2010 was a great year for Toronto real estate, and despite the con­cern about over-leveraged house­holds, sales held up while price increases were mod­er­ated. Over time, home val­ues increase with incomes. Indeed, aver­age resale prices and per­sonal incomes both rose 5.7 per cent per annum in Canada in the past 30 years. How­ever, prices more than dou­bled (113 per cent) in the decade to late 2007 and grew twice as fast as incomes from 2002 to 2007 — largely due to the dra­matic decline in mort­gage inter­est rates and the eas­ing in credit con­di­tions by the Canada Mort­gage and Hous­ing Cor­po­ra­tion (CMHC). Even after slid­ing 13 per cent through the reces­sion, prices quickly rebounded and are now 10 per cent above their 2007 peak for Canada as a whole. Look­ing ahead, incomes should grow faster than prices in the next one and a half years — the time frame in which inter­est rates are expected to nor­mal­ize — allow­ing val­u­a­tions to improve. If incomes climb eight per cent and prices sta­bi­lize, as I expect, the cur­rent over­val­u­a­tion would fall to six per cent, hardly the stuff of cor­rec­tions. Grow­ing incomes and steady prices should sup­port afford­abil­ity in the face of expected higher inter­est rates. To date, low inter­est rates have kept afford­abil­ity in check.

Harry Stin­son: I am not an econ­o­mist, and even if I were, it seems one can find sta­tis­tics and experts to sub­stan­ti­ate opti­mism or pes­simism to any scale — so I can only offer my instincts and expe­ri­ence. Frankly, I am becom­ing uncom­fort­able with Toronto prices. Typ­i­cal “new con­struc­tion” prices in Toronto are mov­ing past the point of sen­si­bil­ity, in terms of pos­i­tive cash flow or resale upside.  That’s not to say that prices of $600 per square foot (and up) are inap­pro­pri­ate or unachiev­able in Toronto. Pre­mium dol­lars are jus­ti­fied and sus­tain­able for addresses such as the King Edward, Four Sea­sons, Ritz-Carlton or some build­ings in Yorkville, but there are tens of thou­sands of new units rolling onto the mar­ket tak­ing such price points for granted across the board.  More and more I am hear­ing peo­ple tell me about their “great invest­ment”: a one– bed­room for only $500,000, in a new build­ing the name of which tem­porar­ily escapes them at this moment — but it’s def­i­nitely in a “hot area.” With apolo­gies to President’s Choice, the term that comes to mind is “mem­o­ries of ’89,” when con­dos eased into becom­ing a finan­cial com­mod­ity rather than accom­mo­da­tion. When the major­ity of suites in most new projects are pre-sold to investors being wined and dined at lav­ish “VIP” recep­tions, my spidey sense starts tin­gling. I don’t antic­i­pate an across-the-board price cor­rec­tion, nor a wave of U.S.-style fore­clo­sures. But the pre­mium price band­wagon is over­crowded, and it would not sur­prise me if a num­ber of projects were redesigned, repack­aged or even deferred.

Garth Turner: It is com­fort­ing to hear Harry Stin­son has joined the ranks of the real­is­tic. Those who cry that Canada can­not and will not have a “U.S.-style” hous­ing cor­rec­tion are wast­ing their breath. A Canadian-style cor­rec­tion, given the tapped-out sta­tus of most fam­i­lies, is enough to worry about. A cor­rec­tion of, say, 15 per cent fol­lowed by a slow multi-year melt will be enough to make new­bie, equity-less buy­ers or boomers with the bulk of their net worth in a house, regret that they were ever lulled into a com­pla­cent stu­por by the real estate and bank­ing cartel.

Harry Stin­son: I am not book­ing pas­sage on “Garth’s ark” quite yet, but I’m cer­tainly no longer of the “Don’t worry, be happy” state of mind. And even if there is a cor­rec­tion, I don’t fore­see a wave of Cana­dian defaults. When prices dropped seri­ously in the early 1990s, most [Cana­dian] own­ers sim­ply held on.

Garth Turner: True enough, Harry. But the prob­lem is not defaults, it’s neg­a­tive equity. That dis­si­pates the wealth effect, which ris­ing house val­ues give and nukes con­sumer spend­ing. We do not need a “U.S.-style” hous­ing col­lapse here to reap sim­i­lar results. When most middle-class peo­ple have most of their net worth in one thing, time to split. Still some room on the ark, pal. The lem­mings left for an open house.

Harry Stin­son: Well, I will put my first-class ark ticket on my credit card.

Garth Turner: Excel­lent. I have an ark miles program.

Jerry Ham­mond: I cer­tainly believe we are in times of growth; our immi­gra­tion has increased year over year. This coun­try has a neu­tral posi­tion polit­i­cally and has a sound and strong econ­omy. I feel, due to polit­i­cal unrest in other regions of the world, we will con­tinue to be a favoured coun­try to reside in. The real estate val­ues may be increas­ing, but if we com­pare our pric­ing to other major cos­mopoli­tan cities, we are undervalued.

Garth Turner: Jerry, are you run­ning for pres­i­dent of the Board of Trade? Those words scream “trust me” to peo­ple con­sid­er­ing walk­ing into the great­est debt load of their entire lives, at rates bound to reset, to buy an asset that looks over­val­ued at best.

Barry Cohen: Res­i­den­tial real estate in the Greater Toronto Area has posted one of the health­i­est decades on record, with prices steadily increas­ing since 2000. Hous­ing val­ues have risen 77 per cent, up from $243,255 in 2000 to $431,463 in 2010. Given the cur­rent tra­jec­tory, since the lev­el­ling of 1996, real estate only has one place to go … UP. Unlike other Cana­dian mar­kets that have seen seri­ous double-digit increases in aver­age price, hous­ing in the GTA has appre­ci­ated at a sta­ble, healthy pace, a five and six per cent yearly rate. Given the many failed pre­dic­tions over the past 15 years, why cor­rect now? They have hardly got it right thus far. While the hous­ing units of sales may appear to have soft­ened some­what from 2010 lev­els, due to the lim­ited sup­ply, the mar­ket is expected to remain hearty, with the aver­age price fore­cast to climb a mod­est but healthy and sus­tain­able two to four per cent by year-end. What’s wrong with that?

Garth Turner: This is the kind of state­ment that so mis­leads inex­pe­ri­enced, impres­sion­able, house-horny young buy­ers. I almost fear it is intended to do so. But I’m wor­ried even more that you believe it. Real estate is an asset class like all oth­ers. It does not go up for­ever. It is heav­ily influ­enced by eco­nomic fac­tors as well as hor­mones. And those who say buy now or buy never are almost always the sell­ers. I would coun­sel condos-for-sale/firsttimebuyer.htm”target=”_blank”title=”first time buyers” >first-time buyers to put their desires back in their pants and wait for an inevitable price correction. Buying today with five per cent down is to condemn them to being underwater with the first move downwards. Barry’s good at pumping sunshine up rear ends, but not so much at being responsible.

Harry Stinson: I can’t say that I am as categorically certain of where the world is heading as some panelists seem to be, but I am very uncomfortable with the assumption that “real estate can only go up.” For some reason, I have visions of Leslie Nielsen calmly reassuring people that there is nothing to worry about (“Return to your homes; the government has everything under control.…”).

Brad Lamb: Two thousand and ten was not the best year in total sales in the history of Toronto. It was actually the third. It was, however, a very good year. It also appears that 2011 will be a strong year as well. I expect that 80,000 resales will take place this year, making 2011 a year not unlike 2003 in volume.  We do have a problem in Toronto. Prices are rising too fast. This is an issue for basic affordability. It is also a problem for condominium investors looking to carry an investment with a 25 per cent down payment. They can’t. If these five to 10 per cent annual increases continue, we will have a correction regardless of the strength of the economy. Essentially, what will happen is new development sites will have to shut down due to poor sales. Garth’s scenario is unlikely. Most of the risky mortgages were done two years ago, and by and large, these buyers now have excellent levels of equity. The U.S. meltdown was initiated through wildly inappropriate lending practices due to a unique banking and mortgage system in the U.S. We do not practice anything remotely like the U.S. model.

POST: Eighteen thousand new condominium units went up in the GTA last year. Another 17,000 will go up this year, and another 20,000 will rise next year — meaning Toronto will have more condo units for sale than any other city on the continent. Are we oversaturating our market with condos? Is this portion of the market most vulnerable to a correction?

Garth Turner: [In response to Brad’s comment:] This is a handy piece of Canadian myth, which also goes to the nature of the question regarding condos. Those property virgins enticed into buying with 5/35 financing two years ago only have equity now because of the illusory nature of market valuations. They have not paid a thousand bucks off their principals nor dumped in more cash. They are repeating the faux market mistakes of our American friends, thinking that unrealized capital gains are in fact real money. They’re not. And they will vanish in the slightest of market corrections. This is the danger that it seems nobody on this panel is willing to acknowledge (except Harry, who knows better), given the ritualistic chanting of “real estate always goes up” I’m hearing. It’s hard having a cogent argument with cheerleaders. Too damn flirty. We have allowed people without money to buy houses. We’ve lowered lending standards. We’ve introduced teaser interest rates. We have zero-down financing and liar loans. And we believe a market correction is impossible. So how are we not “anything remotely like the U.S. model”? Toronto condos embody this danger. The worst real estate investment in the country. Well, east of Richmond [B.C.].

Brad Lamb: Garth is massively overstating the situation. Unlike the U.S., we never abandoned sane lending behaviour and quickly moved to adjust in areas that were too lax. It was over two years ago, when zero per cent down and 40-year amortizations were possible. In that time (based on a $200,000 one-bedroom, 500-square-foot unit), a buyer would have paid down $5,000 to $7,000 of principal and accumulated $75,000 capital gain. This currently would give the buyer almost 30 per cent equity. There is no ticking time bomb.

Barry Cohen: It has become apparently obvious that condominiums are certainly becoming the first step in home ownership for many first-time buyers in the GTA. Eroding affordability has been in large part behind the push in recent years, but other factors have come into play, including location.

Harry Stinson: Frankly, I do not foresee a public meltdown of the Toronto condo market. Builders will likely defer some projects and deal with nervous purchasers on a case-by-case basis. “Better” projects (location, sponsor, design) will continue. As usual, the people who will lose out are the more highly leveraged small investors, who will sign releases — and walk away from existing deposits — in order to avoid having to pay further deposits and come up with closing funds. They will quietly take their lumps in the Canadian way. Even more sad, by the time the buildings are completed (in several years) their units might well be worth as much or more.  Meanwhile, the deep-pocketed investors will indeed close and possibly work with the developers to absorb the rescinded units for the balance due, or less.

Elli Davis: I was involved in two bidding wars tonight on two houses (both sold over asking). I can’t say the same for my condo listings.

POST: In our neighbourhoods, the homes are reaching astronomical heights. What we’d like to know is who is buying up these multi-million-dollar homes on established streets in areas such as Lawrence Park and Hogg’s Hollow? Foreign investors or locals?

Harry Stinson: On this issue, I will probably agree with Garth even before reading his comments.  Once upon a time, people looked at certain houses and thought, “Wow” (and assumed they must be expensive). Now, they look at prices and think, “Wow, for that house!?” Without getting into a big-picture socio-economic analysis of where and who the money is coming from, there seems to be a growing disconnect between product and price. If anything, this trend speaks volumes about the desirability of Canada — and Toronto — as a place to live. I am definitely an advocate of con­dos.htm”target=”_blank”title=”toronto condo liv­ing” >condo living, but when own­er­ship costs become $4,000, $5,000 or $6,000 per month, then big-picture socio-economic fac­tors become less and less rel­e­vant on an indi­vid­ual or fam­ily basis.

Jerry Ham­mond: The obvi­ous answer to that is build­ing small suites.

Harry Stin­son: I do under­stand the con­cept [of small suites], but when the prices for small suites are creep­ing into the $500,000-plus range, that’s when we should get nervous.

POST: Brad Lamb, Garth Turner, any­one else care to comment?

Garth Turner: On who is buy­ing in to the horsey set areas of North Toronto? Who cares? This is a road the delu­sional fools in Van­cou­ver and Rich­mond have been trav­el­ling down, trump­ing up Main­land Chi­nese buy­ers’ influ­ence and then using this as a mar­ket­ing tool to encour­age the cit­i­zenry to “buy now or buy never.” The truth is that off­shore money is a tiny frac­tion of all Cana­dian mar­kets and will remain so. Toronto (like Van­cou­ver) does not rank among the finan­cial or cul­tural cap­i­tals of the world. We are cheaper than Lon­don, for exam­ple, for a rea­son. Namely, this ain’t Lon­don. More inter­est­ing is who’s buy­ing Lea­side? Million-dollar homes with dodgy foun­da­tions on lots not wide enough to have both a lawn and a dri­ve­way go to the heart of the house horni­ness that has pro­pelled prices to a level from which there is only one future track. This will not end well, for the rea­sons I artic­u­lated ear­lier in this thread and which pan­el­lists have ignored.

Elli Davis: Trad­ing up and trad­ing down seems to be what’s keep­ing me very busy. The over-60 group are divid­ing up the wealth between cot­tages, golf clubs, trav­el­ling or giv­ing “Junior” the down pay­ment for a condo (there’s that word again!) or duplex. Inher­i­tances are play­ing a large part of the new wealth as the boomers are aging and going to never-never land! The trading-up group are pro­fes­sion­als —bankers, doc­tors, den­tists, lawyers, busi­ness own­ers, in their 30s to 50s, who are reap­ing the ben­e­fits of the low mort­gage rates and start­ing to spend some of their hard-earned sav­ings. Many did not spend much from Sep­tem­ber 2008 to late 2009! It’s not sur­pris­ing to hear of a $2 to $3 mil­lion pur­chase with a $500,000 to $1 mil­lion mort­gage being arranged.

Garth Turner: Holy crap. When this obser­va­tion is entered into a gen­eral dis­cus­sion of real estate in our region, we’re in deep trou­ble. Edi­tors, save us! We’ve hit a ’burg.

Harry Stin­son: Not to worry, fel­low pas­sen­gers, the band is still play­ing …  (it’s but a flesh wound).

Elise Kalles: High-end buy­ers are com­ing from China, Korea, Rus­sia and Europe. Also, Cana­dian buy­ers are pur­chas­ing these high-end homes. It’s dif­fi­cult to say what debt load they are car­ry­ing as they arrange financ­ing independently.

Jerry Ham­mond: The lux­ury mar­ket is cer­tainly influ­enced by our for­eign buy­ers. They seem to find our real estate rel­a­tively inex­pen­sive com­pared to other major cos­mopoli­tan cities. The for­eign­ers are immi­grat­ing from China, Iran, Korea, Rus­sia, parts of the Mid­dle East and regions of Europe. Their min­i­mum require­ments are 35 per cent to 50 per cent for a con­ven­tional first mort­gage, if they are not Cana­dian cit­i­zens, and as low as 25 per cent if they are Cana­dian cit­i­zens and can show proper income qual­i­fi­ca­tions. I would esti­mate that they make up a large part of today’s lux­ury mar­ket. They are buy­ing in Canada because of our stan­dard of edu­ca­tion, our social well-being, qual­ity of life, polit­i­cal sta­bil­ity, health care and our con­tin­u­ing eco­nomic growth, due mostly to our nat­ural resources.

POST: Would you rec­om­mend to your son or daugh­ter to buy a house in this mar­ket now, with a rea­son­able down pay­ment and stan­dard mort­gage terms, or to wait it out and risk being priced out entirely?

Mike Eppel: Try­ing to time a mar­ket is next to impos­si­ble. There­fore, if my son or daugh­ter had a solid down pay­ment and low mort­gage costs (locked in over a min­i­mum of five years), I’d be com­fort­able telling them to buy now. It comes down to time hori­zon and per­sonal finan­cial lev­els. If you’re going in with the bare min­i­mums for afford­abil­ity, you’re likely going to strug­gle. Also, if you’re plan­ning on mov­ing again within three to five years, you’re prob­a­bly going to see min­i­mal price appre­ci­a­tion or pos­si­bly a slight retreat for prices (condo mar­ket likely more risky). But buy­ing some­thing in a desire­able neigh­bour­hood with solid finances to back it up should not be a prob­lem. One thing the local mar­ket has been is resilient, so even a decline in prices would likely jump-start the next uptrend (depend­ing, of course, on inter­est rates).

Elise Kalles: Prices have gone up 5.4 per cent, per year, every year for the last five years. For most peo­ple, the best invest­ment they have made is the pur­chase of their home. With cap­i­tal gains ben­e­fits and the fact that you can’t live and raise your fam­ily in your stock port­fo­lio, I believe that a home pur­chase is a great decision.

Harry Stin­son: Don’t take this per­son­ally [edi­tors].   First, the ques­tion itself suf­fers from a per­spec­tive that has become all too com­mon: we are treat­ing our homes as if a stock mar­ket invest­ment. Given the con­text (advice to our chil­dren), my advice would be “Yes, you should own your own home. Notwith­stand­ing the mar­ket cycles and the end­lessly chang­ing insights from experts, you should become — and stay — involved in real estate as a home­owner. If you feel inclined to trade in addi­tional real estate as an invest­ment, then as of early 2011, frankly, I would be very, very care­ful.” As for wor­ry­ing about “being priced out entirely,” if any­one hands you this line, I would walk away and make a note to call the sales­per­son in a month or so.

POST: Don’t worry, Harry, we’re OK.

Jerry Ham­mond: Yes, I would absolutely rec­om­mend that my son or daugh­ter pur­chase a home in this mar­ket. I believe you have to view the mar­ket long-term. Inter­est rates are at a record low, and stud­ies show that real estate has had a steady incline of approx­i­mately six to seven per cent per year, which trans­lates to a strong return on invest­ment in com­par­i­son with other invest­ment options.

Elli Davis: It’s all tim­ing and afford­abil­ity. The answer is yes, as long as there is a cush­ion if inter­est rates rise and there is an ample down pay­ment. I would not sug­gest the pur­chase if it is intended as a fast flip or turn­around, as there can be dips in the mar­ket, as we expe­ri­enced in late 2008 and many other times before.

Barry Cohen: Sure I would [tell my chil­dren to buy real estate]. As a mat­ter of fact, my son looked cau­tiously for a year and only just pur­chased a cou­ple months ago. I told him that real estate is long-term. And he could hold it and pos­si­bly resell it to Garth’s kid when the mar­ket cor­rects. Which is when, again, Garth? Oh yeah, every year.

Garth Turner: If I hated my kids, I would encour­age them to go and see one of the house-pumping pan­elists who have been part of this dis­cus­sion. In fact, the very ques­tion, as posed — buy now or risk being priced out of the mar­ket — reflects the blindly pro–real estate bias that has infected our media, our lives and turned TV into non-stop house porn. Encour­ag­ing a buy now by a young per­son with five per cent down is insane. Dan­ger­ous, reck­less and myopic.

POST: In the GTA — single-detached or condo — that would be a safe area? We know Garth seems to cite the fur­ther reaches of the GTA as par­tic­u­larly risky, but what areas are par­tic­u­larly safe … if any?

Harry Stin­son: Given that we are talk­ing pri­mar­ily about people’s homes (rather than spec­u­la­tion, right?), it would be unwise to focus on “get­ting a good deal” in a loca­tion where you really don’t like liv­ing.  In gen­eral terms, the closer to the core (and rail tran­sit), the bet­ter. A truly “safe” area? How about Mount Pleas­ant Ceme­tery.

POST: In a year from now, where will we be?

Harry Stin­son: Frankly, still in the GTA ago­niz­ing over essen­tially the same ques­tions.  Prices will likely have sta­bi­lized and prob­a­bly soft­ened in the new (pre-sale devel­op­ment) condo mar­ket. Quite likely many projects will have been post­poned, although the pub­lic will not be as aware of this (those that are already on the mar­ket will con­tinue, with inter­nal tweak­ing and sales incen­tives offered). I really do feel uncom­fort­able with upper-middle-class house val­ues (not the super-premium mar­ket) where I think we will see six-figure soft­en­ing. How­ever, Toronto’s pop­u­la­tion will con­tinue to grow, and prop­er­ties will con­tinue to be occu­pied. Unlike many areas of the United States, we do not have — and will not have — neigh­bour­hoods, or even build­ings, with notice­able pro­por­tions of vacant and/or fore­closed prop­er­ties.  That’s not to say that every­thing will be won­der­ful. I really think that many val­ues will soften and that many “investors” will be squirm­ing or scram­bling to resolve their “Plan B. . As a gen­eral rule, peo­ple will be hap­pier with their real estate than their stock port­fo­lio. And Rob Ford will still be mayor (it’s a trade-off…).

Mike Eppel: Slightly lower on aver­age prices, slightly higher on mort­gage rates and a mod­est increase in sup­ply of homes available.

Barry Cohen: Likely the same place we are now, answer­ing a sim­i­lar ques­tion for the upcom­ing year because much will not have sig­nif­i­cantly changed other than the weather will be cooler or warmer, mort­gage rates up a point or so. The num­ber of sales may soften slightly and res­i­den­tial val­ues in the GTA will have moved for­ward mod­er­ately and not cor­rected. Lastly, hope­fully the colour orange will have gone out of style.

Elli Davis: I expect many more condo list­ings for lease and for sale as the new build­ings come to com­ple­tion, and the “flip­pers” will still be mak­ing a profit if they bought four to six years ago — but per­haps not the big bag of gold that they expected. I see the “house” mar­ket still very healthy, espe­cially in the cen­tral areas, and unless the sup­ply increases dra­mat­i­cally, the price lev­els will stay about the same.They are very high now and feel they will level, not increase very much at all.

Elise Kalles: Slightly higher on aver­age prices, slightly higher on mort­gage rates and a 10 to 15 per cent increase in sup­ply of homes available.

Jerry Ham­mond: The demand will remain strong and prices will increase. Inter­est rates will only increase slightly due mostly to our neigh­bours, the U.S. Our dol­lar must remain low or at par­ity since we are an export nation. And by increas­ing inter­est rates, this would only place pres­sure on Cana­dian indus­try and hous­ing. Hous­ing plays a huge role in stim­u­lat­ing the entire economy.

Garth Turner: By mid-2012, the prime rate will be north of four per cent, hav­ing increased from 2011 by a third. There will be no more insur­able 35-year mort­gages. Real estate val­ues will have fallen in the GTA from year-ago lev­els but not enough to restore afford­abil­ity given the higher inter­est rates. Dis­mayed sell­ers slow to drop ask­ing prices suf­fer long peri­ods on the mar­ket. Buy­ers sens­ing there are more reduc­tions to come, hold back, assured that will hap­pen. Thou­sands of GTA con­dos are owned by reluc­tant land­lords who used to be speck­ers and flip­pers, now failed. Rents are declin­ing and sup­ply is swelling. Untold num­bers of young cou­ples who were told in 2009 and 2010 that buy­ing 5/35 was a no-can-lose propo­si­tion are start­ing to slide under­wa­ter. In North Toronto there is shock and awe. This is not the way it was sup­posed to be. Indebted nou­veau Leasiders bay in anguish, know­ing they missed the mar­ket top. Wealthy Per­sians and Main­land Chi­nese won­der what enticed them to invest mil­lions in a city they thought was immune. And the Post City Mag­a­zines panel, by now soundly ine­bri­ated, watches the sun set over Lawrence Park. One. More. Time.

Sherry Cooper: Toronto house prices will be up, but only by two per cent to three per cent, com­pared to 4.6 per cent last year. This slow­down will reflect higher mort­gage rates and tighter mort­gage terms. Garth has been pre­dict­ing near-term Armaged­don for years now. I do not rec­om­mend spec­u­la­tive home pur­chases, but given that 68 per cent of house­holds like to own their res­i­dence and many more aspire to for lifestyle rea­sons (fam­ily rea­sons, pri­vacy, pride of own­er­ship, means of self-expression and just plain human nature), the Toronto res­i­den­tial real estate mar­ket will gen­er­ate mod­er­ate aver­age gains, with real inflation-adjusted appre­ci­a­tion likely below recent his­tor­i­cal norms. Garth seems to believe that home own­er­ship is sim­ply a finan­cial issue. It is very much an emo­tional issue as well, as the behav­ioural econ­o­mists are prov­ing. In the his­tory of mankind, peo­ple have longed to put down stakes and to cre­ate beau­ti­ful, per­son­al­ized homes. Soci­eties with high home own­er­ship lev­els are sta­ble soci­eties. When the Com­mu­nist Iron Cur­tain came down, fam­i­lies worked hard, saved money and bought homes. To be sure, spec­u­la­tive fer­vour takes over peri­od­i­cally, end­ing in col­lapse. I don’t believe Toronto real estate is at bub­ble lev­els. If prices rise too fast this year, which I doubt, we could be in for a nasty cor­rec­tion, but even then, still noth­ing like the U.S. crash.

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Con­tact the Jef­frey Team for more infor­ma­tion – 416−388−1960

Lau­rin & Natalie Jef­frey are Toronto Real­tors with Cen­tury 21 Regal Realty.
They did not write these arti­cles, they just repro­duce them here for peo­ple
who are inter­ested in Toronto real estate. They do not work for any builders.
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