The Toronto housing market is in a bubble. Almost everyone seems to recognize that.
And yet in one article an economist said something I found very interesting. Paraphrasing, they said that the bubble won’t bust dramatically because there’s no catalyst to set it off. Meaning unlike the 1989 Toronto bust and the 2008 US bust this will be a slow levelling off and not a huge bubble busting and surprising everyone.
I think that’s a bit naive and optimistic. I think the catalyst will be self driving cars. Cars changed the way cities are built. I don’t think the subburbs would be as big a part of cities as they are now. I think self driving cars will lead to a similar revolution. I think I will drive (or ride as part of some sort of transportation service) in a self driving car in 5 years. I think over the next 10 years the preferences of where people want to live will be more and more away from downtown cores. Once people realize this, panic will set in and the new thinking will be that real estate in a downtown city is a terrible idea.
I don’t think it will actually be the death kneel of realestate in Toronto. But I think it might just be what pops the bubble.
Edit: http://ben-evans.com/benedictevans/2017/3/20/cars-and-second-order-consequences has a good thorough breakdown of all the ramifications. He (probably wisely) stays away from predictions.