When the real estate market opened in the late 1990s, it was hailed as the most exciting time in Canadian history.
At that time, there was an influx of young families moving in and out of the city, as well as an influx from the countryside to make room for a growing population.
The price of housing in Canada’s biggest cities was skyrocketing.
And when those prices peaked in 2002, a burst of construction and construction start-ups ensued.
The real estate boom of the late 2000s and early ’00s was one of the most lucrative ever in Canada.
In the 10 years to April, there were 1,818 new condos and one million new homes built, according to Statistics Canada.
That boom helped push prices up to $1,000 per square foot.
But now, just as prices are finally starting to slow, a housing bubble is beginning to burst.
The average price of a Toronto home is up about $2,400 since the beginning of the year, according the Toronto Real Estate Board.
That compares with an average of about $1 and a half million in the US.
In the US, where the housing bubble began, the median price of homes sold has jumped from $1.5 million in 2014 to $2.5 billion in 2020.
And the median home price in the United Kingdom has more than doubled since 2010.
The housing market in Canada has also taken a turn for the worse, with average price increases of 5.9 per cent for the last year.
In Ontario, home prices have risen 7.8 per cent, according data from the Ontario Mortgage and Housing Corporation.
In Alberta, the average price increased 5.4 per cent from last year, and the province has the third-highest price increase in Canada, behind the US and the UK.
That’s a bigger jump than the province’s overall price increase, which was 3.3 per cent.
“I think that’s going to be a challenge for the next few years,” said Andrew Geddes, an economist with Dominion Securities.
“We’re just seeing more people move in.
And that is going to lead to more pent-up demand and demand for more inventory.”
The real house price boom started in earnest in late 2016, and prices in Toronto have risen by about 7 per cent in just one year.
Some of that growth was fueled by new construction, while others was driven by buyers willing to pay a premium for a home that would normally be on the market for $1 million.
But some buyers are putting their money down.
Some have been selling their homes, and others are buying, and those buyers are selling even more.
In Calgary, the number of condos that sold for more than $1m has more or less doubled since 2015, according a new report by CIBC.
That growth is happening because the city’s median price is now at more than double the average, which is around $1-million.
“It’s very clear that the number one factor that is affecting the price of real estate is the increase in inventory,” said Ian Shepherdson, chief economist with CIBC in Toronto.
The growth in pent-upty sales has also been fueled by a lack of supply, Shepherdson said. “
As we’ve seen in other parts of the country, the longer you wait, the higher the price will go.”
The growth in pent-upty sales has also been fueled by a lack of supply, Shepherdson said.
As new listings are posted in the months leading up to the new year, prices are rising.
“That creates demand, and supply, and that creates demand for condos and apartments,” he said.
The Canadian Real Estate Association predicts that in 2019 there will be more than one million condos and houses on the housing market.
There is currently a shortage of houses in the country at 1.7 million, which would translate into more than 700,000 homes.
“The problem is we’re going to have a lot more homes available to the market,” Shepherdson told reporters on Wednesday.
“But that’s a problem.”
The increase in prices is causing a big spike in sales.
Sales have increased nearly 30 per cent over the last 10 years.
A recent report from TD Bank predicts the market will be overvalued by the end of the decade.
The Toronto Real Estates Board says the pace of new housing construction will continue to outpace the demand.
And with the pace being slower than it was when the housing boom began, it is predicting that in 2020, the population of Toronto will be 4.8 million.
It says the population could be up to 7.6 million by 2040.
The pace of building has also slowed.
TD Bank estimates that between 2012 and 2017, the pace at which new homes were built in the GTA was down by about 20 per cent compared to the previous year