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Originally Posted by blankall
As long as inventory stays super low prices will remain very high. IMO reopening post covid won't have all that much of an impact. The issue is demographics and baby boomers not downsizing as they become empty nesters.
The millennials are the biggest cohort ever, and that are increasingly starting to have kids and demand more space. You've also got lots of gen xers who have been trying to buy for a while, and their incomes are increasing as they turn 40. Even people from Gen Z are starting to have children.
In places with lots of land, I could see prices easing, once construction costs come down and houses are eventually built. That's a multi year process though, and who knows where inflation and interest rates will be by then.
I do agree that the market has cooled, but it seems like only because prices are now much higher.
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Definitely a nuance of the market that should be pointed out as the demographics are important.
Speaking of land prices. Toronto was ahead of Sydney by 20% 6months ago. You should see the look on someones face when I tell them Sydney real estate is "cheap".
There was a poster talking about infills going up in Calgary's inner burbs with developers soaking up stock. Wages for the middle class outside the public sector have been pretty flat for a decade, but land prices go up as urban populations grow (its where the good jobs are). A $600k house is still a $600k house that is at the edge of affordability for a family making $100k, that house is just going to be smaller and further out from where all the amenities are (CBDs/Beaches/City Views/Mountain Views/entertainment districts, etc).
Big blocks that can be subdivided close to the core will be priced out for single families as they'll have different economics.