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is now ready for its conversion into the inevitable condo. The cranes are
waiting ready. I wonder how much of the original will be visible?
I recently talked with a real estate agent, and asked him if there was any likelihood that the Canadian real estate market would face what was going on in the US. This smart, innovative and enterprising man said: not to worry. But a little earlier on in the conversation, he said he was specializing in foreclosures.
What's going on in Canada?
Well, I've been following this for over two years; ever since I discovered a beautiful lilac bush in front of an elegantly designed three-storey house. About a year later, that building had been torn down, the lilacs gone, and my predictions that a high rise would go up there turned out to be true.
As far as I know, the housing market in Canada is functioning under true demand and supply, where demand for a while has been higher than supply. There aren't any arm-twisting tactics forcing it to accommodate to certain buyers.
This building spree is basing its whole market strategy on speculations on increases in population. Since many Canadian demographic experts are saying that the native population isn't growing by itself, what then is it basing its population growth on? Immigration.
But, there is something else that is causing the intense condo building projects in Toronto. One of the mandates for builders in Ontario is that they avoid prime agricultural land in an attempt to limit urban sprawl into rural lands. So builders have to build "up" in cities instead of "out" into farmlands. This limits the areas where homes can be built, and the number of condos that rise up in Toronto are artificially inflated. In 2007 alone, there were 207 condo projects in the city.
There are other potential buyers targeted, such as single females, divorced couples, empty nesters, and young couples without children. But, almost all the arguments for this building fever point their fingers at the expected yearly increase of 100,000 people coming into Toronto as immigrants.
There are major concerns of course, including urban congestion, destruction of land and parks, and razing down of architectural heritages. But no-one seems concerned about the ability of these potential (because it is still based on speculation) condo buyers to fulfill the expectations of the builders. Given the poor economic performance of Ontario, much of which is blamed on the high level of immigrants, the Canadian housing market will surely experience some of the difficulties that the US is undergoing at some point.
And that must be why the real estate agent I talked with had foreclosures on his mind. He is just preparing himself for what he predicts to be an inevitability.