I agree with your main point (if I understand it).thediamondshopper wrote: ↑Aug 12th, 2017 1:04 amThe exact point was to point out that realestate pricing is no longer tied to incomes or affordability, whether this will become the new norm for Canada's two major centers is what we will see in the coming years.
Many home owners had to scrimp and save to buy their first house, but if levels of 15-20 times average income to get into the detached market were present when that first purchased was made who could say they could have afforded to get into the market, very few. Rather in many current owners cases they got into the market at 3-5 times average income.
Again I'm not a proponent to either up or down for RE it just seems to me that prices this out of wack with incomes isn't a healthy market. As well I am a firm believer that we need significantly more transparency into RE in GTA and GVA so we can understand why we are at where we are at. And even to rephrase the premise that most owners couldn't afford their own homes if starting from scratch to most couldn't have afforded to enter the market if prices were 15-20 times average income when they did, delivers the same point. I absolutely don't believe that owning a detached house in a major city is a right, but when even high income earners like say the average doctor ($225000/ year) just qualifies for the average home at 1.3m (300k down, 1m borrow) I don't see who will enter the market.
If you took the average person who bought their first house in Toronto 20 years and grew their salary at the average wage growth rate for 20 years they would unlikely be able to afford a similar house (with the same standard of living).
I am not saying the average person in Toronto 20 years ago has the same income and wealth profile as the average person in Toronto today.
Of course it's hypothetical but I don't see it as controversial at all.