Since the year 2007 we are hearing here and there some economists warning that Toronto real estate is experiencing overvalued homes and is in a state of a bubble, which will crash and cause a big recession in the size of US recession in the year 2008.

They regularly warn that in case of mortgage rate increase, some homebuyers are not able to pay their mortgages. To be honest some potential buyers and investors are waiting for a market crash so they can steal a deal. In mid 2016 when supply decreased and demand increased drastically in GTA, those economic “experts” appeared everywhere and warned us again. This time speculators and foreign buyers were the «prime suspect» for playing with the market and creating a dangerous bubble.

Instead of encouraging builders to increase the supply, create jobs, and boost the economy government ignored this golden opportunity and decided to eliminate demand to earn more taxes – the biggest mistake that authorities made in my opinion.

What happened is the prices are now less than four months ago and number of transactions are 40% less than last year. However there were almost 8000 transactions with average prices of about 7% more than last year similar time in month of June. I can feel the sign of recovery in early July.

Don’t you think if it was a bubble it must have been burst already?