@Mike Oliveira
In Ontario, you have to break it down into two distinct groups to look at the economics:
1) GTA
As per the Ontario Population Projections Update, 2015-2041:
"The Greater Toronto Area (GTA) is projected to be the fastest growing region of the province, with its population increasing by over 2.8 million, or 42.9 per cent, to reach almost 9.5 million by 2041. The GTA’s share of provincial population is projected to rise from 48.0 per cent in 2015 to 52.7 per cent in 2041."
There is a finite supply of land in the GTA to build on. You can't "create" new land. The GTA market is going to regulate itself based on supply and demand.
Examples:
For semi-detached and single detached homes, we are seeing multiple offers, $25K over-ask on almost every property. Why is this? In the "Toronto" region, there is no more free land. The only way to build a new dwelling is through a tear down. More demand for limited supply.
For condos, lets say the average tower in Toronto has 500 units. Let's also assume half of those units are occupied by 2 people. On average, one new tower will house approximately 750 people.
The Ontario Economic Update 2016 is predicting net migration of 50K+ people each year into Toronto. Since the average home price in Toronto is now around $1M, it's safe to assume most cannot afford one of these. So where are they all going to live?
If the city erects 10 new condo towers and manages to fill them all, that takes care of 15% of the migration into Ontario. Where are the remaining 85% going to live? Even with the rapid development of condos, there is a lot of incoming demand.
I don't see Toronto prices cooling any time soon.
2) Ontario (non-GTA)
These markets are more subject to fluctuation.
Major areas such as Ottawa, KWCG, London, Windsor, etc. are seeing growth. I can speak specifically to London - Sept 2016 has been the best September on record, ever, for home sales. (see LSTAR). Recent sales have gone into bidding wars over-ask.
Hard to say whether this is a direct push affect from Toronto, or if the market in general is heating up too quick. Population growth in London is certainly not pacing at the same rate as home sales.
