And even if the necessary price retrenchment does occur, the unfortunate thing is that only the top 2 quintiles of the working populace came out ‘ahead’ during the pandemic (see BD article from January 22, 2022), so those households are in a much better position to ‘scoop up’ properties that become available due to sales forced upon owners by changed financial circumstances. I would assume that the former households therefore have more leverage to acquire residential properties, than those who are in weaker financial positions who actually ‘need’ appropriate housing. And that doesn’t even include those households with access to liquidity from illegitimate or foreign sources.

I think only in the case where laws change, which clearly prioritize single-family residential real estate as housing for resident citizens first, and as a commodity last, could we see a market that actually reflects both housing needs and the local ability to pay.

freeland: Master! They went all in.
bogdanoff: Dump it!

I hope the gov continue manipulating the market and Canadian functional idiots continue buying into that. It will be EPIC!

In my view, it has to do with the presence of excess liquidity and non-essential buyers in the marketplace;

– excess liquidity: easy / cheap credit, bank of mom & dad, any capital unrelated to working (& paying taxes) in Canada, and laundered money as well as tax avoidance schemes;
– non-essential buyers: speculators, reno-flips, ‘investors’, corporate entities, ‘trusts’ and people using real estate to hide money – anyone who doesn’t live and work here, and also doesn’t need a principal residence.

Non-essential buyers simply add to the apparent ‘demand’, and don’t reflect the actual need for principal housing. Excess liquidity simply allows sellers to demand more, well, simply because more is available.

Further, no changes have been introduced that enforce appropriate accountability upon the real estate profession (at least in Ontario) relative to their compensation structure (or at least a compensation structure that appropriately reflects whatever value-add and liability said services provide). It’s still heavily commission-based (including split-commissions), where all parties have every incentive possible to work against those who have most at stake: the buyers.

And with the federal government’s proposed immigration targets (~400k / year for next 3 years), plus outstanding Afgani refugees (~32,000 as of mid-February 2022), plus an ‘unlimited’ amount of Ukranian refugees (for what is described for now on a 2-year temporary basis), this will certainly add to the physical demand for housing. Alone, this won’t cause prices to increase, but in conjunction with whatever newcomers’ ability to pay is (i.e. legitimate income, savings, illegitimate income, easy credit, etc.), it certainly can.

100% RIGHT but this site is always doom and gloom

The issue cause is a liquidity one masquerading as a supply one. Dry up the liquidity that the banks are flooding the country with and demand dries up. The supply issue is caused by investors buying and hoarding property. If you cut investors out of the equation, its likely that the supply issue resolves itself.

Nope, that was CMHC, the one Canadian government sponsored organization with all of their analysts who should have been able to project the trajectory of market, completely missed the mark, literally could not have been more wrong. How does that happen?

Why on earth are you replying to me? Where did I say “The Canadian real estate market…” in my comment? Did you mean to reply directly to the article and due to your no doubt late-stage arthritis replied to me instead? Or did your Alzheimers kick in and assume anybody would care about you chuckling to yourself?

Agreed. But try to tell a homeowner this and they think you’re nuts! It’s as though everyone was asleep May 2017 to Nov 2019. If you bought a home in May 2017 for $1.9M you could have purchased that same home six months later for $1.5M. If you were willing to wait till March of 2018 you could have purchased it for $1.38M.

That was a bubble and it did burst and there were many factors but mainly interest rates went from .5 % to 1.75% within 6 months.