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The future of Toronto real estate?

From the April 28, 2008 issue of Canadian Business

Could it happen here? The U.S. housing market is bad and getting worse. Builders built too much through the boom, lured by skyrocketing prices that proved as unsustainable as the lending practices that fuelled them. As in any market, the emergence of a big supply/demand imbalance requires sellers to do two things: make less and discount more. So it’s been. Housing starts have dropped 54% from their peak. Home prices are falling in every one of America’s 20 largest cities, down by an average of 13% from their peak.

The scary thing is, though, that even these dramatic declines haven’t been nearly enough to stabilize the market. The supply of unsold new homes stood at 10 months’ worth of sales in February, up from less than four months at the height of the boom. That represents the most bloated inventory in 27 years. The American housing bust has yet a way to go.

Probably the most common question I get these days is, “Could this happen in Canada?” My answer is yes, it could happen here, not least because it has happened here. Canada’s housing busts have tended to be a bit more regionalized than what we’re seeing in the States, but no less profound. It took seven years for Calgary house prices to regain their 1981 peak. It took eight years for Vancouver house prices to regain their 1995 peak. It took 12 years for Toronto house prices to regain their 1989 peak.

See article by David Wolf in Canadian Business »

April 16, 2008 in Selling Toronto Real Estate | Permalink

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Comments

I represent a mexican developer company. Is anyone interested in promote our projects in Toronto?

Posted by: Ignacio Torres | Aug 11, 2008 4:43:14 PM

This question is on the minds of Canadian buyers, re-financiers and observers alike. If nothing else, we are in a buyers market marked with more supply than demand. However, I think that the confidence of Canadian homeowners and the somewhat frugal methods employed by our lenders will result in a noticeable but decreased curve.

Posted by: Halton Houses | Apr 23, 2008 9:43:10 PM

Good blog article and the fact that real estate in 2008 will surely become a DISASTER with the loss of most mortgage loan financing and NO MORE $0 Down loans. A smart Realtor must maximize their opportunity to convert MORE prospects into buyers by offering to HELP them get their bad or damaged credit scores fixed. Please feel free to send all your agents to my genuine Credit Repair Program article at: http://www.jeffboyce.net/credit-repair-and-how-to-fix-bad-credit.html. I'd be glad to help you sell more homes, by getting your unqualified buyers a real nice 30 year fixed loan.

Posted by: DrBoyce | Apr 19, 2008 12:00:17 PM

Unbelievable!,Today Toronto Real Estate Board report that resale is down 5% for period to mid-April, in March down 22%,February down 11% and January down 2%,but Average Price increased about 10%. To when will be sellers market in Toronto Area,economy is in recesion in Ontario but they still increased Homes,property taxes,insurances,fuel etc.
Something is wrong or I am stupid?

Posted by: Mike | Apr 17, 2008 2:11:24 PM

R McGuire,

Regarding Texas. Yes, you did not face the same sitution because the oil industry is located there. But if oil goes down substentially Texas might face the 1980s again.

Real Estate markets turn on a dime. Before you know it the flood gates are open. Every real estate market has a top short term as less and less people have the ability to buy.

Posted by: Investor | Apr 17, 2008 10:19:54 AM

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