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Get Ready Toronto! CCP Investors Pumping up Toronto Real Estate Market!

744 views · Published 16 January 2017 · 10:21 · Indexed 10 November 2026

Channel: Mike Martins · 2017 · News & Politics

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Today we're looking at another major story in the Canadian housing market, and Canada's two biggest real-estate markets appear to be moving in completely different directions.

The article I'm discussing reports that Royal LePage is forecasting another significant increase for the Greater Toronto Area in 2017 while expecting Greater Vancouver prices to decline.

The forecast calls for the GTA's median residential price to increase approximately 10% during 2017, while Greater Vancouver is forecast to experience an approximately 8.5% decline across housing types.

That's an enormous difference between Canada's two largest housing markets.

Vancouver has just gone through an incredible period of price growth. The article reports that the average detached property sold in Greater Vancouver was approximately $1.68 million, compared with roughly $1.02 million in the GTA.

Inside the City of Vancouver itself, detached properties were averaging more than $2.6 million.

Now Vancouver is dealing with the aftermath of the 15% foreign-buyer tax introduced in 2016, tighter federal mortgage rules and an affordability problem that has pushed prices far beyond what many ordinary working people can realistically pay.

Meanwhile, Toronto continues moving higher.

But there's something else about these enormous housing prices that I don't think gets discussed enough.

Imagine you bought your house years ago and it's suddenly worth $2 million.

Congratulations.

But where are you going to go?

If you sell your $2-million house and want to remain in the same community, the house you're buying has probably increased dramatically too.

And if you want to upgrade from a smaller house into a three- or four-bedroom property, the gap between what you're selling and what you need to buy can become enormous.

That's something we're already seeing here in Vancouver.

People can become incredibly wealthy on paper, but they're effectively trapped inside the same expensive housing market.

This also raises another question I've been discussing throughout this series: what happens when investment pushes housing prices increasingly away from local incomes?

Canada operates a relatively open property market, and international buyers have been able to participate in that market.

I'm not blaming somebody for buying something they're legally allowed to buy.

I'm asking whether the system remains sustainable for the people who actually earn their incomes here.

Now Toronto appears to be the market to watch.

Will Toronto continue climbing throughout 2017?

Will Vancouver's correction continue?

And how long can prices separate from what ordinary working Canadians can afford?

Let me know what you think.

Mike Martins Channel — 2017

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