Toronto's housing bubble is at risk of bursting

Toronto's real estate bubble is at risk of bursting


Toronto is the city most at risk of a real estate bubble bursting in the world, according to an international report. 

The international bubble index Swiss bank UBS has ranked the world's 25 largest cities according to the risk of market collapse, and Toronto, followed by Frankfurt and Hong Kong have very high risks due to imbalances in the real estate market, according to the “Toronto Star”.
A bubble occurs when local real estate prices rise rapidly due to high demand and speculation, to the point where they are no longer supported by economies.

In the case of Canada, low interest rates during the pandemic have helped fuel a huge power surge that is growing the bubble that could burst, as the Bank of Canada continues to raise interest rates to slow the inflation, according to the study.

The UBS annual report assigned an index to the real estate market of 25 cities, an index greater than 1.5 indicating that a city is probably experiencing a bu
The City of Toronto received an index of 2.24 and that of Vancouver an index of 1.70, making them the two most at-risk cities in North America.
“Imbalances are very high in the two Canadian cities analyzed, according to the report, which also noted that real estate price levels in Vancouver and Toronto” had more than tripled in the last 25 years.”
Overall, real estate prices rose 14% in Vancouver and 17% in Toronto compared to last year, according to the study.