An economist at Capital Economics, David Madini said, the sharp slumped which was experienced by the real estate market in Vancouver cannot be blamed and had no role to play in the result of the policy changes made on mortgages neither on the endorsement on the foreign buyer tax. Madini made comment in his recent report, saying, “We simply think the housing bubble has burst,” and added that bubbles are “inherently unstable because they are largely driven by unpredictable investor mania.”
The reason according to the economist why there is a significant amount of increase in the price of homes, which is still ongoing in the Greater Toronto Area can be associated with the easier-to-obtain mortgage credit, which is fueling price increases. He also cautioned against over-inflated prices causing pain in the economy sector. Madini penned down, “The performance of the economy this year could hinge on the direction of the much larger overheated Toronto housing market.”
An “economic crisis in the making” was what he termed as the end result of the disproportions of the real estate market and the issue of affordability most are already struggling within the country’s housing market.