Flux Capacitor
Active Member
Why did the market crash in the 80s?
Why did the market crash in the 80s?
But, like most speculative markets, when prices started going down, people started selling in droves.
I would argue spec building is greater today than in 1990. As an early investor in the projects I purchased, I only put 10% down with no additional payments. I don't think there is too much recourse with foreign buyers or buyers that are fully leveraged.
I would also argue the real price apprection is similar today to the 80's if you factor inflation. CPI numbers in the late 80's were in the high single digits.
Your comments don't make sense. There's 100% recourse to buyers. You can't walk away from a purchase and sale contract nor a mortgage. Spec buying may be greater but that's different and shifts risks to individuals as opposed to developers and lenders. There aren't as many foreign buyers as you think- they may be visible minorities but the majority of them, by far, have Canadian residency and citizenship.
Price appreciation DOES NOT REMOTELY COMPARE. It's not something you can argue- it's factual. Inflation may have been high but a loaf of bread wasn't going up 20% a yr in price for 4 yrs.
Adjusted for inflation, Toronto prices are now 20% higher then at the 1989 peak
In 1989 that graph shows $250k as the average price.n Today it's about $450k. I loaf of bread in 1989 cost about a buck and today about $3.50. Seems 2012 prices for housing have nowhere near kept up with 1989 prices based on that simple comparison.