The head of a global commercial real estate firm is denying that Toronto is facing a real estate bubble.
“The market is fairly balanced,” Mark Renzoni, president of CBRE, told The Toronto Star earlier this week.
“It’s being driven by Canadians, moving up, buying for the first time. There are great jobs, there’s a sense of optimism, there’s confidence in the job market and interest rates are low.”
Housing prices have soared in the Greater Toronto Area, jumping an astounding 22.6 per cent in January from a year ago. The city’s red-hot market has prompted increasing warnings of a potential correction.
Last month, Douglas Porter, the chief economist at BMO Capital Markets, wrote emphatically in a commentary that Toronto, and many of the cities that surround it, are in a housing bubble.
Despite concerns that foreign buyers may be driving up prices, Renzoni told The Star that these fears are overblown.
“In Toronto, I would say the majority of foreign interest on residential, especially high rise. . . It’s families. They’ve got students in university here, they’ve got other relatives here, they’ve got one spouse here. They’re buying additional residential real estate because they believe in the investment grade quality of the product,” he said.
In terms of high-rise condos, he said the city’s properties are actually fairly priced when stacked against other major hubs around the world.
“Pricing in Toronto is significantly lower than in Vancouver, significantly lower — discount lower — than New York or London. It’s still balanced and it still creates a great opportunity for people to create wealth and expand their horizons with investment. But also they’re buying for themselves. You have to live somewhere,” he said.
“The marketplace here is really driven on fundamentals, which is supply and demand,” he said.