I’ve been a licensed realtor for ten years and since then, I’ve seen the banks and economists get the market forecasts wrong. Every single year the doom and gloom articles surface.
In the last few months, we’ve seen headlines like:
- Toronto housing called ‘bubble,’ as new listings fall rapidly
- Toronto area in housing bubble, say BMO Capital Markets economists
- Toronto’s runaway housing market heading for paralysis, economists warn
- Toronto Has A Housing Bubble, BMO Says, So Let’s ‘Drop The Pretense’
And that’s just in the last few months! I know I’ve seen the headline, ‘Market to Crash’ umpteen times over the last decade.
Should the banks and economists be held accountable for always being wrong? So many potential purchasers got stuck waiting on the sidelines as a result of a fear of the crash or bubble that never materialized. Now, the price of a small condo is potentially more than what they would have paid for that detached house just a few years ago.
So why is this the case? You’ve probably heard the famous saying, “no one has a crystal ball.” When talking about the current real estate market, nothing could be more true. No one could have predicted the enormity of this boom and, likewise, no one can predict what the future will bring: not economists, not builders, not banks, and especially not your mechanic.
Look at the articles linked above again. Statements about the viability of the current housing bubble have no basis, and quite frankly, make no sense. Maybe the bubble will burst in the next 24 hours. Maybe it will last 42.5 months. Does that number seem random? It’s probably just as good of a prediction as any that the banks have made.
If the banks were so sure of an imminent market crash, why do they continue to lend money at record levels? The mortgage rule changes over the last few years were way more severe than any proposed new tax changes. They certainly didn’t cause the market to slow; in fact it was the opposite. It is impossible to get an institutional mortgage unless you are super qualified.
Toronto is a world-class city, and it’s one of the safest. It should be priced in line with other world class cities. Don’t listen to the banks and economists. The housing boom is here to stay. Imagine if you bought one property every year for the next ten years. How would that change your life?