For the past decade the buzz has been that the Real Estate market in Canada and in particular Toronto and Vancouver is a primed hand grenade just waiting to go off. A “big, fat beautiful bubble” as one particular world leader likes to use as a phrase, but the fact is that the bubble has never burst and just keeps getting fatter and fatter.
There are just as many (mostly in the industry?) who believe that this market is not the same as the last real big bubble in Canada in the late 80s when interest rates were in double digits and the prices rose much more rapidly as speculation ran rampant across the country and the market was spurred on by those who were only buying for a quick flip investment and that was what caused the party to end as it was simply as unsustainable as any other pyramid scheme where the 1st in the pool makes the $$$ and the last guys are left holding the bag when the music finally stops.
And this is what is becoming concerning to those in the know, as the fear is that maybe, just maybe, possibly, this may well have reached that point where it actually IS another speculative bubble and the music may well be getting ready to stop and there will simply not be enough chairs for all those who bought into the myth that the prices can keep rising for ever.
They unfortunately cannot.
They never do.
And that is where many experts now believe we either are or are heading very rapidly.
In those heady late eighties the market looked much the same with rapidly rising prices and the average selling price of a home nearly doubling in a span of only 3 years.
In the year the bubble burst, 1989, the party was clearly over and the market continued to decline with prices dropping steadily over 7 years. The market did not regain the lost value until the early 2000’s.
The way prices have risen so rapidly in the past few years IS troubling but the there are some differences in the parameters of this market as well as most economists and ALL real estate agents or brokers will tell you and it is those reasons that make this market a little less volatile and more sustainable over the long haul.
Will the market slow a little so everyone has a chance to catch their breath and hope that the good times will continue to roll?
Apparently not as the TREB or Toronto Real Estate Board predicts that the growth in prices in 2017 will be in the range of 10-16 percent! Bubble or Boom? We will just have to wait and see!
