Is this a Mississauga Real Estate Bubble?

Some experts are suggesting the current surge in the housing market to be a bubble that might burst in a few months. Others like the Bank of Canada governor Mark Carney believes the economy is strong and there is no real estate bubble in the forecast.

Carney made his state of the economy address yesterday with comments such as:

“Although the recession in Canada was severe, with real GDP contracting for three consecutive quarters, the magnitude of the downturn was more modest than in other major advanced economies. In particular, domestic demand held up much better in Canada than elsewhere, reflecting the soundness of Canada’s banking system, relatively healthy household and corporate balance sheets, and the speed and scale of monetary policy actions.” and “In Canada, the recovery is expected to evolve largely as anticipated in October, with the economy returning to full capacity in the third quarter of 2011.”

The Canadian economy is projected to grow by 2.9 per cent in 2010 and 3.5 per cent in 2011. These are strong numbers. Consider how strong our banks are, growth in oil and gas revenues, price of gold, and you can see why our dollar is so strong right now.

Scotiabank has this to say about the global economy which will affect Canada’s economy in 2010 “We expect global growth to average 3% in 2010-11, following last year’s contraction of 2%.

Obviously a lot of real estate investors know this is an ideal time to buy and everyone is getting in buying anything they can at bargain prices and interest rates. Home Prices are rising fast and there’s no reason to believe they will fall, so where’s the risk? We should see house flipping hit record numbers this year. Resale home sales are unbelievably strong.

Tridel was expecting sales of new units to drop but instead their sales have increased by 15%. In the Toronto market, existing home sales rose 17 per cent over 2008, while the average price of a
home gained 4 per cent to $395,460. And, the beginning of 2009 was horrendous. December made up for it and January sales are already breaking records.

Experts suggest the GTA real estate market has been very resilient and with the economy improving, there is no reason to believe conditions won’t remain stable or improve. The long term forecast is certainly positive. With mortgage rates so low, there is likely never to be a more opportune time to buy a home