For over a decade, the Toronto and Vancouver real estate market has been getting bad publicity. Real estate articles, commentaries and analysis commonly discuss the high levels of mortgage debt, speculative investors and the unfolding of the markets when interest rates rise. Time and again, predictions have been made that the real estate market situation in Toronto and Vancouver will put the Canadian economy in peril.
Real estate expert Ben Myers pointed out that the Toronto and Vancouver real estate market has been severely undervalued in the global scene. With his 15 years of experience in the industry, he singled out comparison as the major culprit of why the Toronto and Vancouver real estate markets have long suffered scrutiny.
When you are purchasing a certain product, you tend to check different stores in the mall to compare prices. As you go from store to store, you get a pretty good idea if the store is offering a good deal or if they are overpricing. The same concept, according to Myers, applies to Toronto and Vancouver. Because the markets are compared to other major cities like New York and Florida, Toronto and Vancouver's markets seem like they are lagging behind.
"This method of comparison was valid when Toronto and Vancouver were second-tier global cities. But that has changed. These markets have ascended to the ranks of world-class cities," he wrote.
Myers cited that Toronto and Vancouver's income numbers appear lower than they should be. He reasoned out that it is because in the two Canadian cities, properties are typically bought off by foreign investors to keep as vacation properties or to rent out to relatives at a discounted rate. Because they are non-citizens of Canada, they do not report their salaries to the country.
He explained that the numbers "don't signal overvaluation, an overabundance of property speculation, or impending doom." Instead, they could "actually signal the ascension of Toronto and Vancouver into the highest of global ranks."
