Quote:
Originally Posted by Leondros
What data set are you looking at though - all of Canada? Vancouver and Toronto (and close areas) must have exceeded historical metrics when looking at affordability. I do not believe otherwise. Even smaller markets such as Montreal, Victoria, etc. are seeing upward pressures and I doubt salaries have adjusted in kind.
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Yeah, that's all of Canada. And yes, you're right that those places are exceeding historical metrics in terms of affordability (as is Canada overall). But that is largely a function of interest rates rather than price increases.
To me, the current situation looks a lot like 1980 and 1990. Both times saw quick reductions in nominal prices (which we've already seen over the last 2 years), interest rate drops that improved affordability, and then years of sluggish growth in real estate where value was eroded by inflation and wage growth. Maybe I'm wrong and that won't happen this time, but we've seen things like this before.