In recent years there’s been a lot of discussion about the affordability of homes in Canada, and whether we are experiencing a real estate bubble. A lot depends on location, as always when talking about buying a house. But the numbers on the ground where I live are concerning.
In March 2020 the average resale price of a home where I live was $590,176. A year later, March 2021, the price had risen to $744,775. A 26.2% increase in one year, which is a record-setting pace. The average house was appreciating in value over $10,000 a month. That makes for a very fluid marketplace. I was recently informed by a real estate agent that one local home had sold for more than $300,000 over asking. I do not live in Toronto or Vancouver, by the way.
I don’t know if this is a bubble, but it is a run-up that has to stop at some point. I don’t see how such inflation is sustainable. But will there be a collapse, or just a freeze or gentle deflating? And who is buying all these million-dollar homes anyway?