Merged: GTA RE Bubble Bursting Bearish news and updates
Excerpts from a 1988 Toronto Star article, entitled:
" HOT, HOT HOUSES Forget all those conspiracy theories about what's behind the crazy Toronto real estate market. Here are the real reasons why house prices are soaring - and why they'll stay high"
Friday, July 15, 1988
Absolutely everyone from cab drivers to chief executives has a story about Toronto’s crazy housing market. Politicians and tenants’ groups have declared a housing ‘affordability crisis’ – again – and have called for a tax on speculators’ profits to cool down the frenzy. Dark words are muttered about how foreign money is to blame.
In fact, the price explosion has occurred for simpler reasons. Mortgage rates are low… Residents of this huge, rich, expensive urban conglomeration have taken somewhat hopefully to calling their city ‘world class.’ But the price of being world class is ‘Manhattanization.’ Torontonians are getting a taste of the housing problems of the world’s major cities.
Owning a house is now the investment of choice for most of the middle class. Because inflation has outpaced wage gains for most of the decade, salary earners feel they can gain ground only by possessing property. The equity in a house provides – tax free – a major portion of most people’s retirement nest egg. To cope with the high costs, it’s become standard practice for house-poor owners to build and rent out a self-contained apartment.
^ Does any of this sound familiar?For many Torontonians, the North American dream of home ownership has already faded, and they’ve joined the ranks of renters, probably for good. Those intent on owning will find themselves forced to think small.
Full article, circa 1988 here: https://www.scribd.com/doc/314505251/To ... ubble-1988
Then one year later in 1989, the GTA RE market crashed and sadly, many lost everything.
It took 20 years - A GENERATION - for the Toronto market to recover to 1988 levels, adjusted for inflation:
Maybe it's different this time?