TORONTO, ONTARIO — (Marketwire) — 06/04/12 — Fears of a Toronto real estate bubble and resulting bust are overstated, says a new analysis by Central 1 Credit Union.
Central 1, the financial facility and trade association for most Ontario credit unions, expects Toronto-s housing market to perform well through 2014 and generate moderate price gains.
“I believe economic and population growth, growing consumer confidence, and generally low mortgage rates will keep the market moving ahead,” said Helmut Pastrick, chief economist at Central 1.
Pastrick says supply constraints and rising land prices are the main factor pushing Toronto house prices higher and those issues are not going to disappear. The main danger facing the housing market are external factors, such as continuing turmoil in Europe, causing a global recession that could send the housing market into a major downturn.
Looking at long-term population projections and household sizes in the Toronto area, Pastrick estimates that by 2036, prices could rise by 60 to 95 per cent from their current record levels. While there will be cyclical swings in house prices, the long-term trend will be up as housing demand expands in the midst of land supply constraints.
Central 1 released two reports today, an analysis of the valuation of the impact of supply constraints on Toronto housing and a market outlook for 2012-14.
Highlights:
“People adjust to high and rising house prices in many ways,” Pastrick said. “Some may choose smaller or older houses, or longer commutes. Others may delay purchases and accumulate a bigger down payment. There is no question that in the longer term, a greater percentage of Toronto residents will be renters.”
Toronto Housing Outlook 2012-2014
Toronto Housing Prices and Valuation
Central 1
Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $82 billion in assets and is owned primarily by its member credit unions, 45 in B.C. and 106 in Ontario.
With offices in Vancouver, Mississauga, and Toronto, Central 1 provides a wide range of services such as liquidity management, direct banking, and payment service solutions. For more information, visit .
Contacts:
Central 1 Credit Union
Art Chamberlain
Media Relations Manager
905-282-8534 or 1-800-661-6813, ext. 8534
Central 1 Credit Union
Helmut Pastrick
Chief Economist
604-737-5026 or 1-800-661-6813, ext. 5026