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Originally Posted by opendoor
I don't know, we saw pretty similar conditions in the late '80s. Canada's population and immigration numbers were increasing quickly (about 1.5% population growth/year which is similar to now), housing prices were skyrocketing despite a rising-rate environment, and housing affordability was actually worse than it is now.
Eventually it all came crashing down and inflation-adjusted housing prices stagnated for about 15 years, resulting in housing becoming pretty cheap through the '90s and early '00s.
I'm not sure I'd bet on that happening again in the same way, but it's certainly possible.
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Compared to the early 80s, Canada has about twice the amount of people living on more or less the same amount of land.
You also had all sorts of crazy stuff going on in the 80s that doesn't happen anymore, such as condo buildings being built entirely on speculation, as opposed to pre-sales. And although the price increases seem crazy now, they were actually much bigger in the early 80s. For example, in Vancouver, you had prices rising almost 100% in one year.
A huge crash is definitely possible. I think we've seen a significant adjustment already. So there may be room for another, but the shortages will keep things relatively high.