Toronto’s record house prices could soar a further 17 per cent by the end of 2017 as the lack of supply in the face of unrelenting demand continues to drive prices far beyond the rate of inflation, says the chief economist of Central 1 credit union.
Long-time housing watcher Helmut Pastrick says those who caution that Toronto’s market is in bubble territory and about to burst are based on “inadequate models” that ignore some key basics.
“The principal drivers of home prices are market demand and supply fundamentals. Toronto’s population is growing and supply is limited. Prices will keep rising until the next economic recession, whenever that is.”
Barring any unforeseen global crises, that’s at least two years off, predicts Pastrick, who’s studied the housing market for 40 years, 18 years as chief economist with Credit 1, the umbrella organization for about 130 credit unions in Ontario and B.C.
Ontario housing markets, with the exception of Toronto, have largely underperformed since 2001. But that’s now likely to change in the face of the “economic seismic shift” of slumping oil prices that may be a drag on the Canadian economy but a boon for Ontario exporters and manufacturers, says the economic forecast being released Thursday.
He anticipates that Toronto home prices, which averaged $573,183 in 2014 could soar to $670,000 by the end of 2017. Ontario house prices, which averaged $430,984 in 2014, could hit $496,000 during the same time.
Southwestern Ontario, and especially communities with a strong manufacturing base such as Windsor and Sarnia, are likely to see an uptick in jobs and economic growth which could play out in strong house sales and above-inflation price increases to the end of 2017, he adds. full article >>
By: Susan Pigg Business Reporter
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