The Housing Bubble is NOT only in Toronto and Vancouver

Many who believe that massive housing bubble exists, believe it only exists in Toronto and Vancouver.  This is false and also an irrelevant argument, for even if it were true, the run up in these two cities would be enough to cause massive damage to the Canadian economy.  We believe that the price run-up has also occurred in most major Canadian cities (though often not to the same extent) and in many small towns.

I’ve read a few articles and blog posts that posit the run-up in prices is contained to Toronto and Vancouver which is hogwash.  Some of these articles hilariously preface by referring to Toronto and Vancouver as Canada’s largest cities (Toronto is the largest but Vancouver is the 8th largest!).  Statements like that call into question the entire validity of the argument.

The logic to this argument is silly. Even if it were true, and the housing bubble was originating from Toronto and Vancouver, would it not, at least spread to nearby cities?  How on earth would prices in Toronto run up 100% and cities that are nearby, like Hamilton or Oshawa, not also see a run up?  As prices increased, people would move to Oshawa, buy a house and commute to Toronto and this would start to drive up prices there as well.  And, that’s exactly what has happened.

We would argue that almost every munipality in Ontario, except for those very far north or very far south, are stuck in the same housing bubble.  As an example, see the below chart:


As of last year, house prices in Barrie, Ontario have nearly tripled since 2008.  A staggering increase.  If you now take a look at the next chart, you can see a few more cities in Ontario that we were able to find data on:

Hamilton, Oshawa, Kitchener, Guelph have all close to doubled or more since 2008.  Next we have a chart that shows  Kingston and Ottawa.  While they’ve seen increases, it’s not assured from the chart that they’re in bubble territory.  Still a large increase.


The one region of Canada that doesn’t seem to have seen major price increases lies between Montreal and the East coast.  Montreal and Atlantic Canadian provinces have not seen much or any run-up in prices.  But only Montreal would have a major effect on Canadian numbers since all of Atlantic Canada has a smaller population than Montreal (the second largest city in Canada).

While Montreal hasn’t seen much of an increase, you can see a slight appreciation in the last couple years.  If this housing madness continues, this might become a trend and maybe then Montreal will join most of Canada in a housing boom.  Another thing to consider about Montreal: the city has been struggling financially since the 1995 referendum which saw many corporate headquarters leave the city for Toronto.  Since then there has been a corporate capital flight from the city which has caused years of hardship

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