Canada’s housing market ‘highly vulnerable,’ CMHC warns

Is Canada’s Housing Market at Risk?

Is Canada’s housing market vulnerable?. The talking heads continue to take the view that we only have “moderate” overvaluation. Clearly, these are people who have not and will not actually look at individual housing prices, like those in the “old” city of Toronto. I lived in a neighborhood where our house cost $147,000 in 1984. Sure, that’s 30 years ago. It now has an asking price of around $1.75 million. Salaries have not increased tenfold since that time. I was getting paid $35,000 as a tax manager at a major accounting firm in Toronto. I do not need to do any statistical analysis to conclude that the same position doesn’t currently pay $350,000. It’s likely and possible that this individual may be getting between $125,000 to $150,000. But I tend to doubt it.


Canadian politicians have thrown the middle class under the bus. Housing costs in the GVA and GTA have created a situation where middle-class income earners who will have no possibility of buying a house in Toronto for anything less than around $750,000. This will involve dedicating most of their disposable income to mortgage carrying costs. When you add on property taxes, utilities, insurance and the rest of the expenses involved in home ownership, it will truly become backbreaking.

As a result, it will be necessary for many of them to rely on parents and others who can provide them with equity to put into the house. As to why it has gotten this way is simple, the politicians. It’s not like there is a shortage of land in the Greater Toronto Area. Poor public transportation alternatives, high land servicing costs and the like have fueled the fires of rising high house prices. Where else can the blame lie?

Torontonians will have to settle for less. Smaller houses, smaller condos, smaller everything. This will be coupled with higher carry costs and stagnant income growth. Not a pretty picture. Toronto will be populated by the old and the wealthy. And of course, the poor.  You see them everywhere.