Real estate is part of the cycle of greed and stupidity, and anything is possible !

I think as the boomers start moving to nursing homes and start dying off, there will be a glut of houses on the market, reducing their value. Unless of course we allow thousands more immigrants into the country, witch seems to be the trend ?

I believe realestate in Canada will go the same way as realestate went in the U.S.. We as Canadians are unwittingly accumulating more personal debt because of greed even though we witnessed first hand what it did to our southern neighbours. Our mortgage rates are incredibly low and we are living in a false economy, the bubble will burst.

Housing may have doubled in the past 10 yrs in Toronto and other hot markets, but houses only 40 min east of Toronto have not. Interest rates are at historical lows and still (in most cases)it takes 2 incomes to support mortgage payments at these low rates.
Unless someone is holding back some serious information regarding the doubling of wages in this same period I seriously doubt housing is going to rise even 50%. Remember the 80's when interest rates rose, housing prices dropped and people walked away from their homes because their mortgage was more than their home was worth or they just couldn't afford the payments any longer? This generation is already being dubbed the boomerang generation where 1 in 4 adults between the ages of 21 & 30 have returned home to live with their parents at least once due to financial hardships. Housing like any other market have bubbles that burst and this one can't tolerate much more hot air.

I believe only a crisis can make the price go down.
For example lets say I own a house that I paid X amount for unless I lose my job or for somother reason cant maintain my income I will not sell it for less than I paid for it

When my parents perchased their first home in 1968 they paid less than $19k for a three bedroom, one bath, semi-detached home in the Beaches of east T.O. My father was making less than $20 working six days week washing dishes in 1955 after arriving in Canada with my mother. He purchased his 2nd house a year after his first and it was a detached three bedroom, two bath with a attached garage also in the Beaches for $23k. Both homes have been sold years ago, semi sold in the mid 90's for $215k and the detached sold in 1978 for $135k. He purchased a brand new 2400 s/f 4 bedroom back-split, three bath, custom built in Scarborough in 1978 for $159k. He sold it this late September for $560k in less than 7 days after residing there for over 30 years. Now, my point is the economy over the years had survived under many ups and downs. Canada has grown richer, stronger and wiser. House prices will be influenced by supply and demand. The market always correct itself whenever things get out control. We'll all still be here, just look after your health and sleep well everyone.

This is the only chart you need to know why real estate has gone up for 40 years http://i42.tinypic.com/5np74.png

It's an 80-year demographic (lifetime) cycle. The period we're entering now will be similar to 1930-1970. And no, immigration will not stop the cycle. We would need millions of immigrants per year just to stand still. Immigration will actually slow this decade as our economy slows.

Anyone thinking what @ mitch is pushing better think again. Nobody can predict accurately or make good sense of our constant evolving economic world. Some suppose experts theorize with lots of speculations and numbers.
I've heard of 3, 5, 8, 10, 15...months/years cycles and now a 80-year cycle...Longer than most of us will live!...
One thing for sure, we humans believe whatever we want to believe...Common sense next to a good education always prevail!...Don't believe everything you hear or read!...Even history and actual numbers can be distorted, just understand where it is coming from and why...

I think it's funny that when these types of questions are asked comparing prices 30-40 years ago(or whenever) to house prices today, general household income is rarely mentioned.I haven't actually compared the numbers, but I bet if you compared avereage household income 40-50 years ago to average income today, the numbers will likely be fairly close. Also, it is very much dependant on supply and demand and that has extreme swings by the city and what's happening there at any given time. And realistically it doesn't really matter! If I payed 120,000 for my house 10 years ago and today it's worth 300,000 for example. It means nothing unless I move and even if I move I have to replace it with another one anyway.

ITS ALL GREED!! PERIOD !!

This conversation should not be continued without mentioning debt. Household inocme, cost to rent, GDP, disposable income have not been kept aligned with house prices.
http://www.theeconomicanalyst.com/sites/default/files/article_inside/2011/04/household-debt-as-percentage-of-gdp.jpg
http://www.theeconomicanalyst.com/sites/default/files/article_inside/2011/07/canada_0.jpg

For every 100 dollars a Canadian makes, they now owe 150 dollars. Plus, the fact that you have Harry Potter pumping real estate like there's no tomorrow.
http://www.youtube.com/watch?v=bp1m_mcRJDk

Don Campbell talks about the massive amount of units being constructed, and then he talks about speculation, and then he EVEN says that people will try to gain some capital from dumping their properties on the market, and he assumes that prices will only go UP? You are making the assumption that people are going to buy all these properties at higher prices that they purchased. Will prices continue to infinity and there will always be buyers at infinity prices? Isn't the amount of debt people can take on a big limitation to this theory? Everyone has to see through this guy. There isn't a way to make a quick buck in real estate like there was 10 years ago. That opportunity has gone.

We've been warned about from outside economic agencies about the huge debt load households are taken, and this shouldn't be ignored in this conversation

A slowdown in China/USA, loss of employmnent, aging population, 70% home ownership (and highest level ever from youth), the highest consumer debt load ever are all reasons to support that the next 10 years will be unlike the last.

The conversation should be can Canada orchestrate a soft landing in Real Estate not if prices will continue to infinity.

@b
I don't know if I understand you correctly, but no, income in our age does not support these house prices. When income goes up 1% and house prices appreciate 12% for several years in a row, that's what some people call a bubble. You can see how house prices and disposable income have diverged in opposite directions in the last decade
http://www.theeconomicanalyst.com/sites/default/files/article_inside/2011/09/house_prices_divided_by_pdi-_canada.jpg

This can explain what's happening the best. You can see how higher houses are almost perfectly aligned with the willingness of individuals to take on more debt (as a percentage of GDP).
http://www.theeconomicanalyst.com/sites/default/files/article_inside/2011/05/06/house_prices_vs_mortgage_debt.jpg

@Petr...you're putting me to sleep with your sharp intellect...ZZZZZZZZ

@Lazarus

Thanks. I just want people to be careful and make the right decision. It's the biggest purchase in an individual's life. Time's are changing and RE should no longer be considered a super safe "investment". With that said, in the (very) long term real estate will probably be higher prices than they are from now.

@Petr...Life is short for most of us...Make it simple...People will forever make their mistakes...Our world continues to evolve daily for the better...I can see light at the end of the tunnel for the human race...Time will be our saviour...as we all come out of our mindless ages through better education...simplicity keeps us interested in learning...Unfortunately, I've been around too long and have seen too much selfishness in our world...Hope you understand, I mean no harm to your effort...However, stop and analysis your own writing and you'll look back someday and remember this incident... wondering...who the hell was that person...we're all still here...continuing to evolve and make mistakes...

I stand to correct @b's statement of "I bet if you compare average household income 40-50 years ago to today is likely fairly close"...Just look at Ontario's Unionized Workers and its minimum wages...@ Petr...Now, you can see what I mean by...Mindless Ages...some of us are still in it...Our New World of the Internet...Blog and social networking including Twitter...really allows us all to shoot off our mindless rants...

The Bottom line is...DONT RENT..You are throwing your hard earned money away..Again DONT RENT.. All you are doing is making your landlord rich..Get the downpayment GET IT..

Canadians can be different from Americns and get different results. Put 20% down. Then buy. And buy the smallest, not biggest, house you can live in. Buy the big house to show off when you can afford it. Nobody cares how big your house is anyway. Just you. And if they do care how big your house is, you probably don't want them as friends anyway because they will turn out to be fairweather friends. Do these things, otherwise we're headed in the same direction the States went. Not great.

If European and Asian investors have their way, housing prices will triple, in ten years. Myself personally don't know why people want to be in an "UNDERWATER MORTGAGE", a mortgage that is worth more than there home.

To CanadianCutie
If only people would follow your wisdom..Keeping up with the "Joneses" is what keeps most people in over their heads..Better to have a little place that suits your needs and its all paid for ..Than a big mansion so to speak with a big Mortgage just to show ..LOOK AT ME...LOOK AT ME...

I'll tell all you guys one thing...Happiness. What is it?? Well it is Three Things..One..Are you Healthy..Two.. Do you have someone that loves you.And Three. Is your accomadation (House / Condo)..PAID for.NO MOTGAGE.?? Answer yes to those three questions.then my friends You have The Keys to the Kingdom...

Bravo-- Gus

I believe Gus has the right approach. Live within your means, don't attract a lot of attention to yourself, and be debt free. That way, you have less stress which leads to better health which leads to a happy life. What elese is there?

Although I was fully agreed with the fact that real estate are the most profitable sectors, but sometimes economic crisis are being very much effect the whole business structure, but the future of a real estate business is seems to be bright.