There are always arguments about whether we’re in a real estate bubble or not, but I suppose it doesn’t matter to me much since I’m invested in the market – i.e., if the market goes up then when I sell I’ll make more money, but it’ll cost me more to buy the next house.
That philosophy is kind of fine, except that the rate that property values are increasing seems to be much higher than the rate of salary increases. In a recent Globe and Mail article, the Toronto neighborhood with the highest property value increases is my neighborhood, Willowdale. From July 2009 to July 2014, the average house value increased 90% from $667k to $1,270k. That’s a yearly growth of 14.1%, and I don’t think most salaries increase that fast (and every year).
The second highest neighborhood is Newtonbrook (just to the west of us) and the third highest is my old stomping grounds Agincourt. They are all above 10% year upon year.
Those numbers seem crazy to me! For perspective, in 2013 the average Canadian salary is under $50k. Looks like Toronto is going to become a SF or NYC.
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