Toronto housing at ‘crisis point’ as prices soar: broker

Toronto Area Real Estate Broker John Pasalis Warns Affordability of Homes in Nation’s Largest City Reaching ‘Crisis Point’ Amid Soaring Home Prices During Pandemic .

In an interview on Tuesday, Pasalis, president of Toronto-based brokerage firm Realosophy Realty, said the decoupling of economic and wage fundamentals from home prices had pushed potential buyers to the brink and may have shut them out of the market altogether. from Toronto.

“People are frustrated: I mean, if you do, [as] a household in the [Greater Toronto Area] $ 120,000, $ 130,000 a year, the reality is you can’t buy a house for your family. You cannot afford a three bedroom house with this income, even though it is way above the median household income, because there is simply no house below this price range of $ 700,000. “, did he declare.

“We’re getting to this point of crisis where many families are considering simply moving out of town for other parts of Canada or the United States because housing is incredibly expensive here, especially in markets like Toronto and Vancouver.”

While home selling activity has moderated in recent months, the housing market has remained extremely tight in the Greater Toronto Area (GTA). In July, the average home price rose 12.6% year-over-year to $ 1,062,256, while active listings fell 35.2%.

While much has been said about this lack of affordability that hinders millennials looking to get their first home, Pasalis said the pressure on mom and dad’s bank shouldn’t be underestimated as young people Canadians are asking for help from family members to get their foot in the door in the hot housing market.

“I think there is this misconception that homeowners constantly want to see this rapid acceleration in home value: the reality is that a lot of homeowners have children or grandchildren, and at least those we are with. are very, very worried about the ability of their children or their grandchildren to buy a house, ”he said.

“A lot of them find themselves overloaded, where they have to write their kids $ 100,000 checks so they can get a down payment for their house. This is one of the challenges that we face, where most of the people who buy a home can do it because they have parents or grandparents who are basically paying them large down payments for their home. I think it creates a lot of pressure, not just for first-time home buyers, but for a lot of people who own homes and whose kids want to buy a home tomorrow.

Pasalis said policymakers are best served by looking for ways to limit appreciation in house prices, rather than fueling demand with election promises, especially given the pressures that Canada’s immigration targets also operate in the housing market.

“One of the reasons house prices have exploded over the past five years is because our population has exploded over the past five years. Our population is growing at a faster rate than we can actually build homes. I think these are some of the tensions the federal government needs to consider when considering how to slow down this rapid appreciation in house prices. “