Toronto Real Estate: Housing Crisis or Investment Opportunity?
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Andrew La Fleur: Now here’s an interesting article from thetyee.ca written … looks like it’s written by an academic from University of British Columbia, so it’s a bit of a different perspective. It’s a longer article, but if you’re interested in these things, I do recommend you check it out, “Why the housing crisis is really about globalization?” That’s the title. Sub-title here, “Free flowing capital breaks the link between prices and local incomes, and most of us are shut out.”
So, it’s something that we’ve talked about a lot on this podcast, and on these videos over the years, but it’s great to just see a nice succinct summary of some of these thoughts. Here’s a quote, which I think is important, “The world sees Canada as a safe, economically secure and politically stable country and Vancouver as a particularly attractive city. Indeed, Canada is among the happiest countries, and Vancouver with Toronto rank among the ten most livable cities on the planet. This makes the Vancouver property market highly attractive to foreign investors, legitimate and otherwise, so local housing prices now reflect global realities.”
So, he’s basically making the point that, look, we have a housing crisis in this country, particularly in Vancouver and Toronto. Housing crisis in the sense that more and more people cannot afford to purchase housing, and more and more people can actually not afford to even rent housing in our cities. And if we just are looking at it primarily as a housing problem, then we’re not going to solve it. We need to understand that this is a symptom of a globalization and global reality that people from around the world are looking at Canada, and are looking at Vancouver and Toronto in particular to park their money, so as a condo investor reading articles like this, on the one hand, it’s kind of depressing because you think about the next generation. You think about your kids, and people that are coming up behind you, and realizing that a lot of people are just not going to be able to ever purchase property, and some people are not even going to be able to rent homes and condos in our cities, and they’re going to have to move and live elsewhere.
But at the same time, if you are an investor looking to profit from the market, then it’s actually very good news, because you do see the trend that’s happening. You see that there are forces beyond anyone’s control that are behind all of this rise in real estate prices and rental prices, and so you’re either going to get on that train and benefit from it, or you’re just going to sit there and watch it go by. So the choice is yours, but hope you enjoyed this article, and until next time we’ll talk to you soon.