g'day all - dear G.G., while you are certainly not the only voice about overvalued equity markets [and the desire to see a return to the gold standard?] the argument of the falling RE market in Toronto suburbs is interesting but IMHO localized - and thus cannot be used as an inference to the anything in general.
IMHO, the Toronto [and Canada in general] RE markets were bid up by the HK immigrants after the Tiananmen incident. At that time, there were stories of people paying above asking price for houses in places like Scarborough. However, in the past 3 years, with the Canada job market still being soft and the HK transition has become a non-issue, some HK immigrants have actually decided to return to HK and thus creating an imbalance of supply and demand.
Interestingly, the US RE market was hit in the early 90s. Back in the roaring 80s <VBG>, even the worst towns of a metropolitan area got a lift. Now, the US RE market has recovered, but only the desireable towns have gone on to higher higher but the marginal cities have languished. Here, the RE market has become a bit more rational. The demand is driven by considerations like school districts and job availability, like Palo Alto, Manhattan, Seattle, Boston.
Incidentally, I suspect this will apply to the HK RE market, i.e., while the overall market has corrected by 30 to 50%, the highly desireable locale will recover fast and first.
best, Bosco |
