Toronto Has A Housing Bubble, BMO Says, So Let's 'Drop The Pretense'

Source: http://ift.tt/tvAe1u - Wednesday, February 15, 2017
Bank of Montreal’s chief economist finally came out and said on Wednesday what many others have been thinking recently. “Let’s drop the pretense,” Douglas Porter wrote in a report. “The Toronto housing market — and the many cities surrounding it — are in a housing bubble.” Detached homes in Toronto's inner city. (Photo: Getty Images) It's the first time, in years of debate on the issue, that an economist at a major Canadian bank has declared themselves on the side of the bubble-believers. Porter’s comments came as the Canadian Real Estate Association issued its January numbers, showing Greater Toronto’s benchmark house price rising 22.6 per cent over the past year, to $705,900. The average price nationwide was $470,253, roughly the same as a year ago. Toronto’s house price gains were offset by declines in Vancouver and Alberta's markets. "Toronto and any city that is remotely within commuting distance are overheating, and perhaps dangerously so." — Douglas Porter, chief economist, Bank of Montreal ​ Toronto house prices are seeing “the fastest increase since the late 1980s — a period pretty much everyone can agree was a true bubble,” Porter wrote. Porter said that though there are different precise definitions of a bubble, most would agree it’s “when prices become dangerously detached from economic fundamentals and start rising strongly simply because people believe they will keep rising strongly, encouraging more buying.” Many o

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