Tag Archives: House prices in Toroonto

The ‘Big Smoke’ – Part II

IMAG0604We walk down to the municipal park, my grandkids and I, past the garbage bins and recycle containers and into the broad, well-tended expanse of splash pools and basketball courts. These recreational areas are everywhere in some parts of Toronto. In a city of this monumental size, the idea is to get the kits and pups out of their tiny, fractional backyards.

It’s a downtown development strategy no one talks about in the burg that Drake named. Here, in Moncton, maybe that’s a conversation we should have. In every other respect, though, we don’t know how lucky we have it.

Late last month, the CBC reported, “All three levels of government (will) meet Tuesday in Toronto to figure out ways to cool the red-hot real estate market in the region, where average home prices have shot up 33 per cent in a year.

Immediately after figures revealed the average home in the Greater Toronto Area cost $916,567 in March, Finance Minister Bill Morneau called for the meeting with his Ontario counterpart Charles Sousa, and Toronto Mayor John Tory.”

As Mr. Morneau fretted that he is “concerned that dramatic price increases will have long-term implications for housing affordability and housing market stability,” Mr. Sousa added that he was almost scornful of those with “deep pockets. . .crowding out families who are trying to put down roots.”

Indeed, as the Globe and Mail reported in February, “Bank of Montreal is not backing down from a call that residential real estate prices in the Toronto area are moving too fast: economists at the bank are comparing prices to a runaway train. BMO recently urged market watchers to drop the pretense and acknowledge that Toronto’s housing market is in a bubble.”

The piece continued: “Chief economist Douglas Porter explains he made the bold call to reinforce the message that the market has lost contact with economic fundamentals and has the potential to become dangerously overheated. ‘This is not a near-term call on the market,’ he stresses, “in fact, given the outlook for interest rates and an improving underlying economy, there’s nothing obvious to meaningfully slow the market at this point,’ Mr. Porter says in a note to clients.”

Of course, for big cities around the developed world, there’s nothing new in any of this. Vancouver has, for years, been hobbled by absurdly high house prices. Rental markets have also been squeezed to the point where some reasonably paid workers have been forced to bivouac – if only temporarily – in their cars and trucks.

Still, affordability is one social measure of income and labour market stability, and it speaks directly to the equitable distribution of wealth. According to a Statistics Canada report, based on 2011 data, for example, “the population of Moncton census metropolitan area (CMA) was 138,644, representing a percentage change of 9.7 per cent from 2006. This compares to the national growth of 5.9 per cent and to the average growth among all CMAs of 7.4 per cent. . . In total, there were 58,294 private dwellings occupied by usual residents in Moncton in 2011. The change in private dwellings occupied by usual residents from 2006 was 13 per cent. For Canada as a whole, the number of private dwellings occupied by usual residents increased 7.1 per cent.”

Moncton is not yet in any credible danger of travelling down Toronto’s path. But safe, affordable housing is an issue that’s becoming urgent in almost every urban area of Canada. Wise political moves and intelligent social policy should mitigate the effects of runaway market forces – if we have enough foresight.

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