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Toronto housing market’s downturn may have an upside

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Richard Lautens / Toronto Star

Royal LePage CEO Phil Soper says that, like a lot of chief executives, he is prone to optimism.

But that didn’t stop him from calling Toronto the least healthy housing market in the country when prices were galloping ahead in the double digits in the first quarter of the year, peaking at 33 per cent year over year in March.

Soper says it’s not self-interest as a realtor that leads him to believe that Toronto’s slumped market will recover in the same way as Vancouver’s has. That market has lately rebounded after the B.C. government imposed a foreign buyers tax last summer, paving the way for Ontario to introduce a similar levy on non-resident transactions.

The last major national housing correction followed the global economic crisis in 2008. The conditions simply aren’t there this time for a major market meltdown in Canada, says Soper.

“It’s very rare to see employment improving, the economy expanding — to see inflation under control and to see a significant collapse of the housing market,” he said.

But he doesn’t deny there are unknowns — NAFTA, for example.

“The most obvious external downside risk is the trade negotiations between Canada and the U.S.,” he said.

“A significant negative outcome on trade wouldn’t have an immediate impact on our economy, but it would have an immediate impact on consumer confidence.”

Nor does Soper suggest that the recent Vancouver correction wasn’t serious.

Continue to read on.Toronto Star

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