Banks can't agree on whether Toronto's real estate market will soon cool or overheat
We've yet to see how hot the Toronto real estate market can get before it crashes, and though prices and purchasing activity have been on the up for months, experts are now predicting a sudden adjustment that will bring prices down to something a bit less ridiculous than they currrently are.
According to at least two of Canada's top banks, a cooldown is coming, even without action by the federal government like some of their peers have been calling for.
Greater Toronto Area real estate continues on its tear.— Gogi Memon (@GogiMemon) April 6, 2021
TRREB says the average selling price jumped 21.6 per cent in March, versus the same month last year.
TRREB chalks up the strength to confidence in an economic recovery and low borrowing costs and a lack of inventory.
Chief Executives at Scotiabank and TD believe that current prices — including the recent jump to $1.75 million for the average detached home in Toronto — are in part a result of increased demand and dwindling supply, which is an imbalance that will likely soon right itself without any intervention.
Low interest rates fueled by the health crisis have helped people purchase homes they may not have been able to afford previously, while condos saw a brief dip that made bargain hunters jump at the opportunity and quickly drive prices back up again.
Then there was the exodus of people from the city, which caused booms in nearby municipalities such as Oshawa, Hamilton and Burlington, with property prices across the GTA now likewise spiking as Toronto proper gets more hectic and high risk.
Awesome! This isn’t limited to Toronto & Vancouver. Real Estate values are on fire, all over the world, due to stimulus printing, low rates & lack of supply.— Rumplestillskinn (@Rumplestillsk13) April 6, 2021
Bidding wars and houses going for way over asking are now the norm, and we're the only North American city deemed on the verge of a bubble — just a few reasons why experts at institutions like RBC and BMO are advocating for steps like a capital gains tax on principle residences, which would be bad news for homeowners.
Don't forget about the foreign buyers and anonymous corporate investors purchasing in the Toronto market. Overseas buyers can purchase real estate in Toronto without ever having to set foot in Canada. They and @REMAXca pocket huge profits; Canadian citizens get trampled.— Ty Evans (@TyEvans26109969) April 6, 2021
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