With rapidly increasing prices in the Canadian housing market, many believe that 2017 will be the year the Canadian real estate crashes. This prediction is based on a decreasing demand from buyers. After watching the US housing market crash over a decade ago, it is expected Canada will experience a similar fate. Noticing in popular news stories, everyday highlights a new warning about Canada’s growing household debt, government regulations, and increasing prices.
Essentially, a housing bubble is recognized when there is a run-up in prices from increasing demands. At some point, as the demand decreases/stagnates, the supply continues to increase. This results in a sharp drop in prices, and the housing bubble then bursts. Due to a different structure than the US has the bursting of Canada’s housing bubble will likely be painful financially, but not as devastating. This is because only certain parts of Canada are currently in a bubble.
During this time it is important for buyers and sellers to be smart, do their research, and talk to professionals for tips and insight on how to interact in this housing bubble. Ellis Davis is an example of a professional team that is an expert in Toronto’s real estate market. Talking to the team about possible next steps for either buying or selling, will help ensure the best decisions are made!