Mild correction in the GTA?

Change Location

Back to Conversations

FRANK MARGANI

NewBee

Doug Porter, of BMO, at the land and development conference this morning stated that the GTA housing market is about to experience a mild correction. Is he right?

Toronto / General Chit-Chat

MARCO DIFOTI

BabbleBee

476

Whats up with BMO?? Dr. Sherry S. Cooper says the same thing in the Financial Post.
She compares Canada to Spain in the article and says:
"The Toronto condo boom has raised the spectre of a Spanish-style housing bubble fuelled in large measure by foreign capital and domestic investors — but the numbers so far pale in comparison to what happened in Spain or the U.S."
I have seen on Buzz realtors talking about foreign investment in condos at 2-3%, which does not equate to huge numbers.
From her article, I see very little similarities between Canada and Spain. I am not sure what type of game BMO is playing, but it seems a bit fishy.

FRANK MARGANI

NewBee

Interesting. Porter went out of his way to clearly state that Canada is in a great global position, especially compared to Spain, Portugal, Greece, etc. Specifically, he refers to Toronto as a market that is slightly overvalued and potentially overbuilt. Comparing it to other major Canadian cities, it should perform worse than based on higher unemployment and higher avg $/ unit.

MARCO DIFOTI

BabbleBee

476

I forgot the link, here it is: http://business.financialpost.com/2012/05/01/putting-torontos-housing-boom-in-perspective/
So, why does Porter think that Toronto is due for a mild-correction? What does he base that on?