Oct 1 | Posted by Barry Cohen

I’m sure you have been exposed to the ubiquitous chatter about the Toronto housing bubble at sometime recently, either on the nightly news, in business journals, at your workplace or even just idle elevator conversations.  It’s a topic that has a lot of tongues wagging for sure because what goes up must come down – right?

I would usually agree with that – but in the case of the GTA real estate market I would strongly disagree – at least for the foreseeable future – and I’ll explain why.

There are a number of reasons why our market is so strong and prices and demand continue to increase every month and I believe the most obvious reason would be:

Popularity - Toronto tops the lists when it comes to “Best Cities to Live and Work In” let’s face it, we have culture, world-class entertainment, recreation, excellent education and employment opportunities, a solid standard of living and we’re safe and clean – who wouldn’t want to live here? We embrace diversity with open arms and as a result, people immigrating to Canada want to live in the GTA, it’s one of the few global cities where people from anywhere in the world can find others like themselves. 

Scarcity – Prices for any commodity are determined by the supply and demand equation – right now in the GTA housing market there is high demand and low supply so that shoots prices up – it’s Business 101.  Another part of this scenario is the scarcity of buildable land – I mean we can keep building upwards with skyscraping condo towers but as far as usable land for single family home builds – it simply doesn’t exist – any farmland within driving distance of the GTA was snapped up years ago – meaning that if you want a house you have to buy an existing one.

Cheap Money – Even though interest rates have been historically low for some time, rock bottom borrowing rates help mitigate the sticker shock for many buyers in our area.  An unexpected sharp hike in lending rates might cause some initial chaos, but with international uncertainty and our sluggish economy don’t expect to see rates jump any time soon – our economy needs the stimulation that low rates provide.

Population – Our population is expected to surpass 9 million in the next 20 years so demand for housing isn’t going to decline – in fact the opposite will be true.  Many young people are getting into the market now while they can still afford to with the help of parents, grandparents or an inheritance.  There also seems to be a trend with commuters who are fed up with the daily gridlock packing up and moving closer to work in the city putting even more pressure on existing housing stock.  Let’s not forget the largest portion of our population – the Baby Boomers – who have become empty nesters and are selling the family home in the 905 and moving back downtown where they can walk to restaurants and amenities.

You can see why I don’t predict a housing market collapse any time soon – there are just too many compelling reasons for real estate demand to stay strong in the GTA.  If you are curious about the market value of your GTA home, I would be happy to meet with you and provide a professional, accurate evaluation, answer your questions are share my expertise with you.