Is the Toronto housing market going to crash?

Much has been said, and pages of ink spilled, on the question of whether or not the Toronto region has a housing bubble. Depending on how much you understand economics, the answer may surprise you.

Is there a housing bubble in Toronto?

Canadians are well aware that the Toronto housing bubble is one of the worst in Canada, and as it turns out, it’s also one of the worst in the world. A new report from Toronto-based UBS Wealth Management found the city to have the second-riskiest housing bubble in the world when compared to 24 other major cities.

Is Canada housing market in a bubble?

From 2003 to 2018, Canada saw an increase in home and property prices of up to 337\% in some cities. By 2018, home-owning costs were above 1990 levels when Canada saw its last housing bubble burst. Bloomberg Economics ranks Canada as the second largest housing bubble across the OECD in 2019 and 2021.

Is there really a housing bubble?

The housing boom is not a bubble—but prices are likely to fall when interest rates rise. The real consequences in terms of employment and widespread recession will not come as they did in the Great Recession, but many home buyers will be disappointed with the prices they have paid in the years to come.

Is the housing market going to crash in Toronto?

Toronto real estate is massively overvalued at these levels, but no crash is forecast. Home prices are 39.5\% above the trend as of Q2 2021, almost double the national numbers. Over the next year, prices are forecast to grow just 0.86\%, followed by an 0.05\% decline in the year after.

Is Toronto housing overpriced?

The UBS Global Real Estate Bubble Index ranks Toronto just behind Frankfurt, Germany among major urban markets with overpriced housing that is not supported by incomes and demands outsized mortgages.

Is Canada housing market going to crash?

Despite lingering concerns from the Canada Mortgage and Housing Corporation (CMHC) and others about the precarious nature of the country’s housing market, there remains little risk of a crash, according to Scotiabank vice president and head of capital markets economics Derek Holt (pictured).