“I think a lot of people are questioning some of the pricing, but I think the reality is that people are willing to pay,” says Mark McLean, a broker in Toronto. “In a lot of ways we’re hamstrung by the greenbelt, so Toronto – downtown Toronto living – is becoming priced at a premium and I don’t see that going away anytime soon.”
McLean’s sentiments come on the heels of another report claiming Canada’s housing market is overvalued. The U.K.-based The Economist compared housing prices to rents and incomes to determine the country’s market is 38 per cent overvalued.
However, this report – much like those before it – appears to ignore such factors as astronomical demand in markets such as Toronto and Vancouver. Speaking specifically to the International Monetary Fund’s report earlier this year, Ben Myers, the senior vice president of market research and analytics for Fortress Real Developments, said agents and their clients should, for the most part, ignore doom and gloom coming from analysts well removed from the vagaries of the Canadian economy.
“To try to distill an entire market down to two numbers, then on top of that to divide one number by the other, divide flawed data by flawed data will just increase the ‘misleadingness’ of the data,” he said.
Myers says it’s important for homebuyers to trust the experts on the ground. And, as McLean says, those experts don’t appear to be concerned.
“What I’m hearing – I have 60 agents who work in our office – I think they’re not placing any cadence in that stuff,” McLean says. “They’re going about their business. We have to adapt to the market.”
Yet another group of analysts are calling Canada’s housing market overvalued – this time by 38 per cent – which begs the question: should agents be concerned?