“I don’t think it’s worth the effort even speaking of it,” says Phil Battista, a sales rep in the GTA. “Looking at Detroit as opposed to Toronto or Montreal; we’ve proven that our economy is a lot stronger. We went through part of a recession and it hardly touched us.”
Battista says his clients don’t seem to be concerned with the threat of a real estate correction – the most recent of which calls for a 50 per cent turn-around in housing values.
“If house prices drop 50 per cent you would see Detroit here and I don’t see it happening,” he says. “My clients are not [selling their homes ahead of a supposed crash]. Some of them, knowing that they have a lot of equity in their homes, are buying more real estate. I don’t think there’s that huge scare.”
Earlier this month, Edmonton-based portfolio manager Hilliard MacBeth said homeowners in vulnerable groups – Gen Xers and baby boomers – should sell, even at a loss, in favour of investing outside of Canada. But Battista says the national government has taken great lengths to ensure the market in Canada remains supported.
“There is a huge investment, even in our social system and economic system that I don’t think that will allow it to happen,” he says. “There’s a lot of investment coming from abroad – on average 250,000 immigrants come to this country every year. That’s about two million people over the last 10 years. I’ve been in business a long time, and I’m seeing immigrants who came here five years ago already established.”
Further, Battista says MacBeth has overlooked the concept of supply and demand – namely the short supply of detached properties in cities like Vancouver and Toronto, where demand for such homes is steadily rising. The banks, too, have put rules in place to better protect the market.
“For the first-time buyers it’s a bit harder for them to get into the market, since you have to meet the banks’ criteria,” he says. “But the interest rates are a huge factor. [The market] continues to evolve.”
No, you shouldn’t be worried about the doomsayers calling for a U.S.-style crash, says one industry veteran, claiming even his clients are rolling their eyes at the continued onslaught of overvaluation reports.