[go1979]

Toronto != Downtown Toronto. Part of the reason everyone wants to live in the core is the horrible public transit system. I used to live uptown but near the TTC - almost every weekend in the summer, we had to use shuttle buses because of track maintenance.

When I look at the GTA, prices make no sense to me. Million dollar homes in Markham, 600K townhomes in Mississauga? What incomes justify this?

I do agree with you on the "low interest rates or else" theory. Even a few points increase will cause people at the fringes to exit the market. And that has potential to topple everything over.

[inversionOf]

Many once "low paid" positions now pay reasonable well in the area -- police officers, for instance, can easily make over $100K per year. Have both adults in the house working at those sorts of income levels, and a 600K house is entirely reasonable. Add the green belt encircling the city (the normal release valve of bidding up) and prices rise.

Housing is an interesting economic phenomena because people are often willing to pay whatever is possible to pay, so if you have 100 houses in an area and a single working adult in 100 households, prices will fit the ability of a single working adult. Now get rid of inequality and have the second adult working, and prices simply explode to fill the ability to pay of both adults. And so on. It's how we run to stand still.