Can we really compare the whole US to a mid-size city like the GTA where a lot of higher paying jobs in Canada are? In the US, I think a lot of people don't make more than $30k (of course there a lot more richer households in the US too since salaries are about the same nominally and they don't have to pay an arm and a leg for housing in most parts of the States).jonkoktosen wrote: ↑Feb 17th, 2017 2:24 pmGranted, the US market came back after 8 years, but again, that was in a falling rate environment; But now that mortgage rates in the US have risen slightly in Q4/16 and Q1/17 due to rising bond yields, the impact has been immediate and significant: New mortgage applications fell 31% y/y in February!
As for a catalyst, as I've said, it can be rising rates, buyers being priced out, etc.. But once sentiment changes, there goes your demand. Right now a large % of buyers are speculators buying on the premise that prices will continue to rise. I know many who are doing it right now and they are buying several properties. They're flippers. Once prices level off, or even fall slightly, a massive portion of your buyers will vanish. That's the really the big catalyst that starts the crash in motion. And at these nosebleed levels, once prices start falling, everyone will rush for the exits all at once, accelerate the decline. That's how all bubbles burst, and it's not different here.
Yes, there are high paying jobs in other cities too (doctors, public servants, engineers, lawyers, etc.) but not as concentrated as in the GTA.
There's a reason why people are buying in the GTA because they are staying here for a good part of their life unlike in the States were there is a lot more career mobility moving from one State to another, the economy of Canada isn't really diversed enough to spread these higher paying jobs everywhere.