Originally reported in the Toronto Star
May 27th, 2024
Christopher Alexander, President of Re/Max Canada talks about this year’s market expectations and why those waiting for a GTA market to crash might not want to hold their breath.
Homes like this are now fetching close to or over $1 million.
Do you think average income families will ever be able to afford detached homes in Toronto? Or are those days behind us?
Without the bank of mom and dad, it’s going to be very difficult.
That’s what’s been so sad to see over the last couple of years, this erosion of the middle class, especially in Canada’s two most expensive provinces, and mainly in Toronto and Vancouver.
What advice do you have for people who are getting priced out of the market?
For most people — especially in southern Ontario, or the lower mainland — you’re probably not buying a detached home as your first property. If you want to own real estate, get into the market within your means and start building some equity.
Do you expect housing affordability challenges to result in more internal migration from places like Toronto to more affordable markets like Calgary in the years ahead?
I think that this is the new normal. People expecting prices to fall dramatically in the GTA are going to be left out, and Canada has some incredible cities that are being rediscovered that will continue to attract more and more people.
In generation’s past the housing market was a gateway to wealth creation. Is that still the case?
I think for too long Canadians were using housing as a commodity, but shelter is a basic human need. For five or six years, people just expected prices to go up by seven to 10 per cent — that’s just not realistic or sustainable, and we’ve seen the effects of that over the last couple of years.
The big problem in the real estate industry, and by extension, the housing crisis, can be summed up in one word: greed.
There was a time when developers might have been content to make a reasonable profit on a housing development. There was a time, particularly in this city, when developers like Sutherland and Hugh Cleaver, built homes that people actually wanted to live in and own. There was a time when people saved up to make reasonable upgrades and modifications on their properties. Not anymore.
It’s all about the quick buck. New homeowners (translate: speculators) move here from Toronto, buy up older homes, knock them down, put up 4,000 sq. ft. mansions, sell at inflated prices, take the profits and move someplace else and repeat. The real estate agents fuel the greed through their hype, bravado and b.s. And the developers focus on building bigger and larger chicken coops that look like Soviet-era housing, then try to flog it at inflated prices.
We don’t have a housing crisis. We have a credibility crisis, and the real estate industry, the developers, the speculators, and people like Doug Ford, are to blame.
Isn’t the WHOLE point of the Real Estate agent industry to simply drive up the price of homes ??
“We will get YOU top dollar”
“Sell with us and we’ll get YOU the HIGHEST value possible for your home”
“Our home-stagers make your home look better and larger using fish-eye lens photos”
The HIGHER the sale value – the higher the commission.
Flawed thinking Economics 101??? “Imagined excess people”. It’s not imagined is now a fact as some plus 150,000 people are arriving in Canada monthly. Here’s more food for thought on where they will live. Sean Fraser’s Canada’s Minister of Housing promises 3.9 million home by 2031. Let’s do the math:
60 minutes in an hour
1440 hours in day
525,600 minutes in a year
3,579.200 minutes in 7 years.
SO we need to build a house a minute to hit this stretch goal.
Not Gonna Happen.
Respectfully, I think this author has an overabundance of bias and self-interest in this society destroying outlook, stated across the board, but without any probing policy analysis at all that I see.
I see this, especially, where his prediction for the future is nothing but what his business is based on continued even larger and problematic. He cannot know enough to know what the future will be, besides what the present becomes as it changes along the uncertain path it takes in forced acceleration.
I think he needs to speak to reducing this endless growth mania, or we will never get out of this place. That is because where we are and where we think we are going, cannot be disentangled. Trying to accelerate what we are doing to try to get to some economic state we want , remember – you can’t just go back, because it’s not reversible, to where you want to be, with no lasting impacts or changes.
It was taught to me in my Economics degrees studies that too much demand meeting with too little supply, brought just what we are getting and seeing now – inflation in everything, and social life all around. Everyone knows this.
The trouble is it is not that simple in reality. Unless you put a damper on it just makes it worse. This Ford Plan is a flamethrower, throwing many millions of unfunded tax dollars trying for unoccupied housing starts and permits, for people who don’t yet even live here.
One thing we do know about the physical economic world – there is a limiting velocity. You cannot accelerate growth, or increase the intensity of the forces of economic production to arbitrarily levels.
It does not have to be this way. The biggest cause in this, I have studied much, can be summed as such – too much excess demand from too many assumed, imaginary excess people, and too fast.
The only worse issue, is the blind politicians in Ontario (Ottawa too) that are blindly pumping the quotas for new housing with no consideration of what it will take to house millions of people, or more, how long will it take, and cost in capital and taxes, the climate, and on and on.
Oh, and finally, what about the climate again? An invisible entity?