{"id":229,"date":"2021-04-14T14:31:33","date_gmt":"2021-04-14T18:31:33","guid":{"rendered":"http:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/?p=229"},"modified":"2021-04-14T17:54:51","modified_gmt":"2021-04-14T21:54:51","slug":"skyrocketing-real-estate-prices-spill-over-to-suburban-areas-and-small-cities","status":"publish","type":"post","link":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/2021\/04\/14\/skyrocketing-real-estate-prices-spill-over-to-suburban-areas-and-small-cities\/","title":{"rendered":"Skyrocketing real estate prices spill over to suburban areas and small cities"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"620\" height=\"348\" src=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Tara-DeschampsThe-Canadian-Press-1.jpeg\" alt=\"\" class=\"wp-image-240\" srcset=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Tara-DeschampsThe-Canadian-Press-1.jpeg 620w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Tara-DeschampsThe-Canadian-Press-1-300x168.jpeg 300w\" sizes=\"auto, (max-width: 620px) 100vw, 620px\" \/><figcaption>A real estate sold sign hangs outside a Toronto property (Tara Deschamps\/ The Canadian Press)<\/figcaption><\/figure><\/div>\n\n\n<style>.wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56, .wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56[data-kb-block=\"kb-adv-heading_1ccbd7-56\"]{font-style:normal;}.wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56 mark.kt-highlight, .wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56[data-kb-block=\"kb-adv-heading_1ccbd7-56\"] mark.kt-highlight{font-style:normal;color:#f76a0c;-webkit-box-decoration-break:clone;box-decoration-break:clone;padding-top:0px;padding-right:0px;padding-bottom:0px;padding-left:0px;}.wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56 img.kb-inline-image, .wp-block-kadence-advancedheading.kt-adv-heading_1ccbd7-56[data-kb-block=\"kb-adv-heading_1ccbd7-56\"] img.kb-inline-image{width:150px;vertical-align:baseline;}<\/style>\n<h5 class=\"kt-adv-heading_1ccbd7-56 wp-block-kadence-advancedheading\" data-kb-block=\"kb-adv-heading_1ccbd7-56\"><em>April 14, 2021 | <strong>By Rida Khan<\/strong><\/em><\/h5>\n\n\n\n<p>The average price of a home in the Toronto region has crossed the million-dollar mark and prices all over the country have surged as well. Work-from-home policies due to COVID-19, low-interest mortgages and lack of control by policymakers have sent the already skyrocketing property market to reach new highs.<\/p>\n\n\n\n<p>According to the <a href=\"https:\/\/www.wsj.com\/articles\/canadian-housing-boom-raises-concern-with-homes-selling-far-above-ask-prices-11616590877\">Wall Street Journal<\/a>, housing price increases have long outstripped income increases in Canada. Due to historically low mortgage lending rates and a trend to move away from larger cities, higher housing demands are leading to a spike in the already rising property prices. This trend was previously limited to urban and central cities such as Toronto and Montreal but is now moving to small towns and suburbs due to work-from-home policies.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture1-2.png\" alt=\"Exodus Statistics\" class=\"wp-image-233\" width=\"560\" height=\"325\" srcset=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture1-2.png 468w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture1-2-300x174.png 300w\" sizes=\"auto, (max-width: 560px) 100vw, 560px\" \/><figcaption>A rise in younger people leaving major Canadian cities (Added by Rida Khan\/RSJ)<\/figcaption><\/figure><\/div>\n\n\n\n<p>What a house is worth now has less to do with how many bedrooms it has or whether it\u2019s near a good school and more to do with what someone is willing to pay.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\" style=\"flex-basis:100%\">\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>According to <a href=\"https:\/\/www150.statcan.gc.ca\/n1\/daily-quotidien\/190327\/dq190327b-eng.htm\">DHEA records<\/a>, over the past year, due to limited economic activity during the pandemic lockdowns, middle-income earners moved from a net dissaving to a net saving position\u2014the first time since 1999. The highest income earners also saw a net gain of $207 billion since the first quarter of 2020. As for the lower-income earners and younger households, they have acquired mortgage debt at a faster pace than other households, encouraged by dramatically reduced <a href=\"https:\/\/www150.statcan.gc.ca\/t1\/tbl1\/en\/tv.action?pid=1010000601\">mortgage lending rates<\/a>. Now with low-interest mortgages, the fear-of-missing-out mentality has resulted in housing sales increasing.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"388\" height=\"289\" src=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture2.png\" alt=\"Savings Data\" class=\"wp-image-234\" srcset=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture2.png 388w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/Picture2-300x223.png 300w\" sizes=\"auto, (max-width: 388px) 100vw, 388px\" \/><figcaption>Average Canadian household&#8217;s savings rate skyrockets during pandemic (Added by Rida Khan\/RSJ)<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>According to a <a href=\"https:\/\/financialpost.com\/real-estate\/more-canadians-than-ever-before-are-expecting-higher-home-prices\">poll conducted by the Bank of Montreal<\/a> (BMO), 41% of people are thinking of buying a home sooner than later, as the majority (61%) believe that home values will go up in the near future. Lower-income earners and younger households have acquired mortgage debt at a faster pace than other households, encouraged by dramatically reduced <a href=\"https:\/\/www150.statcan.gc.ca\/t1\/tbl1\/en\/tv.action?pid=1010000601\">mortgage lending rates<\/a>.<\/p>\n\n\n\n<p>Another <a href=\"https:\/\/www.moneysense.ca\/save\/investing\/making-sense-of-the-markets-this-week-april-5-2021\/\">BMO study<\/a> predicts that 62% of Canadians say that most people will be priced out of the housing market in the next decade. 12 major housing markets have posted price gains of more than 30%, according to <a href=\"https:\/\/creastats.crea.ca\/en-CA\/\">data from the Canadian Real Estate Association<\/a>.<\/p>\n\n\n\n<p>This is not a sustainable pattern but most stakeholders in the real estate industry, financial services, and policy-makers are not keen on implementing policies to counter this. Many of the policies being proposed by economists take long periods to implement. The market is a complex mix of income, supply and demand. It is closely linked to many other major markets and touching it directly translates into a huge spillover. There is no one-policy-fix-all solution.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n-529x1024.jpg\" alt=\"\" class=\"wp-image-237\" width=\"422\" height=\"816\" srcset=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n-529x1024.jpg 529w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n-155x300.jpg 155w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n-768x1487.jpg 768w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n-793x1536.jpg 793w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173208454_291620669334461_7554788102655532987_n.jpg 800w\" sizes=\"auto, (max-width: 422px) 100vw, 422px\" \/><figcaption>Housing Affordability in Toronto (Daniel Johnson\/RSJ)<\/figcaption><\/figure><\/div>\n<\/div>\n<\/div>\n\n\n\n<p>A recent <a href=\"https:\/\/www.moneysense.ca\/save\/investing\/making-sense-of-the-markets-this-week-april-5-2021\/\">report by BMO economists<\/a> rated <a href=\"https:\/\/economics.bmo.com\/en\/publications\/detail\/c76a7448-4306-4a50-a335-3a7c98fcbe9e\/\">11 cooling measures<\/a> one of which is ending blind bidding. Ending bidding wars, where the winning bidder routinely pays vast sums more than the asking price, was rated as high in impact and low in complexity and spillover effect. Ontario\u2019s Ford government reviewed real estate practices in 2019 to increase transparency but it failed to remove blind bidding.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe loading=\"lazy\" title=\"How Bidding War Works - CRAZY Toronto Real Estate Market BIDDING WAR 2021\" width=\"740\" height=\"416\" src=\"https:\/\/www.youtube.com\/embed\/u2fWnTiscmw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe>\n<\/div><figcaption>How Bidding Wars Work: Toronto Real Estate Market\u2019s Bidding War 2021 (Added by Rida Khan\/RSJ)<\/figcaption><\/figure>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<p>Increasing housing supply also has limited negative spillover, unlike measures such as the Bank of Canada hiking the current low-interest rates.<\/p>\n\n\n\n<p>Also, the government of Ottawa has shut down proposals to change capital gains tax exemptions on housing. The <a href=\"https:\/\/www.thestar.com\/news\/gta\/2021\/04\/08\/canadian-regulator-might-make-it-harder-for-some-people-to-buy-a-home-in-order-to-cool-down-the-housing-market.html\">Office of the Superintendent of Financial Institutions<\/a> is reconsidering <a href=\"https:\/\/www.thestar.com\/news\/gta\/2021\/04\/08\/canadian-regulator-might-make-it-harder-for-some-people-to-buy-a-home-in-order-to-cool-down-the-housing-market.html\">the Stress Test<\/a> for uninsured mortgages to keep more people out of the housing market and to dampen defaults when interest rates inevitably do arise.<\/p>\n\n\n\n<p>Canada is struggling to find its way out of the COVID crisis. Getting federal, provincial and municipal governments together on a broad set of housing policies from creating affordable housing and more dense \u201cmissing middle\u201d housing to tighter mortgage rules and changes in tax treatment, won\u2019t be easy. However, it is essential because, according to the <a href=\"https:\/\/financialpost.com\/real-estate\/more-canadians-than-ever-before-are-expecting-higher-home-prices\">Financial Post<\/a>, as much as a quarter of Canada\u2019s economy is directly tied to housing.<\/p>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1-433x1024.jpg\" alt=\"\" class=\"wp-image-238\" width=\"267\" height=\"630\" srcset=\"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1-433x1024.jpg 433w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1-127x300.jpg 127w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1-768x1814.jpg 768w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1-650x1536.jpg 650w, https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-content\/uploads\/sites\/120\/2021\/04\/173217282_266912591808354_7184011513689899029_n-1.jpg 800w\" sizes=\"auto, (max-width: 267px) 100vw, 267px\" \/><figcaption>How Mortgage Rates are Determined (Daniel Johnson\/RSJ)<\/figcaption><\/figure><\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>April 14, 2021 | By Rida Khan The average price of a home in the Toronto region has crossed the million-dollar mark and prices all over the country have surged as well. Work-from-home policies due to COVID-19, low-interest mortgages and lack of control by policymakers have sent the already skyrocketing property market to reach new [&hellip;]<\/p>\n","protected":false},"author":460,"featured_media":240,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[81],"tags":[82,83,77,84],"class_list":["post-229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-canada","tag-housing-market","tag-montreal","tag-toronto-2","tag-vancouver"],"_links":{"self":[{"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/posts\/229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/users\/460"}],"replies":[{"embeddable":true,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/comments?post=229"}],"version-history":[{"count":1,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/posts\/229\/revisions"}],"predecessor-version":[{"id":284,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/posts\/229\/revisions\/284"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/media\/240"}],"wp:attachment":[{"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/media?parent=229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/categories?post=229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/project.journalism.torontomu.ca\/jn8201-winter-2021\/wp-json\/wp\/v2\/tags?post=229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}