CMHC chief economist Bub Dugan noted that real estate is one of the sure bets in an ailing economy characterized by volatility and oil price crashes. Housing performance, especially in high-demand metropolitan areas such as Vancouver and Toronto, far outstrips that of commodities and petroleum—and this strength, Dugan said, can be attributed to crucial factors dating back decades.
30 years ago, Vancouver played host to Expo 86, which allowed city officials to put their best foot forward and showcase the city.
“Demand to live in the region picked-up in the late 1980s and early 1990s,” CMHC principal market analyst (Vancouver) Richard K. Sam told HuffPost Business Canada
“An expanding economy and employment opportunities attracted people to Vancouver and fueled population-based demand for housing. Migration to the area was high, especially interprovincial migration,” Sam said.
Toronto, meanwhile, suffered from a housing bubble in the late 80s and early 90s that left a massive unsold inventory which took a significant amount of time to absorb, chiefly due to job losses that weakened purchasing power.
“All indicators pointed to a bubble in the Toronto housing market during the late 1980s and early 1990s. The market overheated, which led to an acceleration in house price growth.” CMHC principal market analyst (GTA) Dana Senagama observed.
“House prices then became overvalued, and overbuilding was observed before a significant decline in house prices was noted," Senagama added.
Historical and recent data all point to continuous price increases in the Canadian housing sector, and experts with the Canada Mortgage and Housing Corp. (CMHC) have identified the main drivers that potential investors and would-be sellers can take into account.