For the doubters out there, Toronto's housing landscape is proof that Darwin's theory of evolution is, in fact, the real deal. As single-detached houses join the list of endangered species here in the 416, we're seeing the emergence of new forms of high-density housing, made to survive this storm of rising prices and dwindling supply, all by virtue of their very design.
The slump in new housing construction in the GTA, which is the worst observed in the past 15 years, can be addressed if one were to understand the fundamental axioms of urban economics. The land is a heterogeneous good whose fertility (profitability) varies widely over space. The provision of low productivity land in undesirable remote places does not qualify as land supply.
The old real estate tenet "don't buy a house more than three times your income" has little merit in today's market. Between the trifecta of record low borrowing costs, monumental price gains and a dire lack of supply across the Greater Toronto Area, working out how much you can afford to spend on your dream home isn't exactly clear.
The government of B.C.'s decision to impose a 15 per cent hike in Land Transfer Taxes for foreigners who buy real estate in metro Vancouver will do almost nothing to lower high housing prices. It will, however, generate even more money for a government that has already profited enormously from foreign nationals.
A money launderer and wealthy entrepreneur from abroad may both be considered "Foreign Investors" with similarly disparate outcomes. A great deal of the former (money launderers) are infiltrating a porous Canadian financial system to purchase real estate in Vancouver and Toronto and have contributed to the out of control housing prices in both cities.