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February 25, 2017 | Nightmare on Main Street: average Canadian Home Price Now $590k

Danielle Park

Portfolio Manager and President of Venable Park Investment Counsel (www.venablepark.com) Ms Park is a financial analyst, attorney, finance author and regular guest on North American media. She is also the author of the best-selling myth-busting book "Juggling Dynamite: An insider's wisdom on money management, markets and wealth that lasts," and a popular daily financial blog: www.jugglingdynamite.com

As Toronto speculators gobble up supply, some industry ‘players’ are calling on government to remove part of the Ontario Greenbelt to free up more land. This is a nightmare on pretty much every level.  (Also see:  Millennials may never get out of their parents’ homes). Supply is not the problem. Once prices mean revert, the market will be awash in sellers looking to liquidate.

“Buying based on the expectation prices will rise further is the quintessential feature of a housing bubble…Investment mania is the root cause of the escalation in house-price gains, and this appears to be the case among homeowners and investors in Toronto. This activity often creates the illusion of shortages when bubbles are inflating, even when there is evidence to the contrary of a booming housing construction industry. Once these types of housing bubbles burst and prices slump in the years that follow, complaints of shortages are rarely heard again until the next bubble begins to emerge.”  See:  Toronto’s runaway housing market heading for paralysis

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February 25th, 2017

Posted In: Juggling Dynamite

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