色色啦

For many 色色啦nians, the real-estate market resembled disaster porn. It was like being in the stands at a Formula 1 race with fans holding their breath, waiting for the big wreck.

In 2003, 色色啦 Life published a breathless cover story on 鈥渟urreal estate鈥� 鈥� because back then, it seemed as if half a million dollars soon wouldn鈥檛 be enough to buy a decent family home near downtown. The big hook for that story was a five-bedroom detached house across from Withrow Park, in Riverdale, near what was then the most desirable primary school in the city, that sold for $725,500. They called it 鈥渁 portrait of a market gone mad.鈥�

Everyone thought: The fall must be coming, right? In 2008, Maclean鈥檚 covered what it called the 鈥渓ooming real estate crisis.鈥� In 2010, 色色啦 Life asked: 鈥淲e鈥檙e in a bubble, now what?鈥� Three years later, Maclean鈥檚 declared that the housing apocalypse was upon us: 鈥淐rash and burn: the housing bubble has burst and few Canadians will emerge unscathed.鈥�

For a long while, the people doing all this predicting were people who could still remember the 1989 crash that saw the average home in 色色啦 lose about 30 per cent of its value. I was a kid then, but there were adults in our family鈥檚 circle who lost everything they鈥檇 saved for all their lives in that crash and wound up underwater on mortgages they could no longer afford as interest rates went up. We weren鈥檛 alone, and for a long while after, there was broad mistrust of increasing housing prices.

But eventually, people came to expect prices to keep on climbing 鈥斅�. What could go wrong? In the mid-2010s, a mortgage adviser at the bank confidently told me that interest rates 鈥渉istorically鈥� had 鈥渘ever gone up.鈥� The market crash and credit-card-esque rates of the 1980s were suddenly prehistoric, beyond memory.

Our collective fear became not that a market downturn would crush the economy and bankrupt homeowners but that ever-escalating prices would prevent anyone new from being able to own a home. Many of us stopped fearing a crash and started praying for one instead.

So is it really here? Maybe. Gregor Robertson, the federal housing minister, recently said聽the 色色啦 condo market was in 鈥渇ree fall,鈥�聽with sales having dropped 70 per cent year over year . And it鈥檚 not just condos. Prices for detached homes are down 10 per cent over the past year, and the average selling price across all home types is聽down 21 per cent from the 2022 market peak.

As May Warren聽reported in the Star this week, many folks are rejoicing. Cheering when a house sells for less than its previous sale price has become a popular online activity. You can understand the celebrations: those who鈥檝e been left on the sidelines of the market so far are hoping against hope for a house to pop up at a price they can afford.

Yet we’re a long way from affordability. The average home still costs more than $1 million. has recently reported, a study by that compared housing costs to income levels found 色色啦 to be the third-least affordable city in North America (dramatically less affordable than such superstars as New York, Miami and Boston).

Many homeowners now selling at a loss got into the market around 2022 鈥� after decades of scrimping and saving 鈥� only to be forced by rising interest rates to offload their property for peanuts and lose all that they鈥檇 saved. For them, the current situation is a disaster. And a broader market collapse could spell a broader disaster still, one capable of spurring (or deepening) an economy-wide recession.

Meanwhile, there鈥檚 a further bad-news side-effect to the apparent good news of less expensive condos, in particular: depressed prices could completely halt new construction. In a city with a real housing shortage, that鈥檚 another potential impediment to real affordability.

We seem to have reached a stage where, all at once, existing homeowners are losing money, houses are still unaffordable and our already-short supply may soon be limited further.

As Robertson said this week, government efforts are focused, as they should be, not on manipulating the market to shore up prices and supply but on increasing the amount of non-market affordable housing available. There鈥檚 some hope that more developers will turn to rental units. Industry insiders say a market correction could result in builders building the kinds of homes people actually want to live in rather than only the kinds investors want to speculate on. So perhaps we鈥檒l have a legitimate reason to cheer someday.

For now, after decades of confidently (yet mistakenly) predicted downturns, it seems the downturn has indeed arrived. But I wouldn鈥檛 dare predict what might happen next.