Yesterday, I reported on a study by the Fraser Institute showing that Ontario has become dangerously reliant on the overheated housing market to drive economic growth.
A combination of economic regulations that damaged the manufacturing sector, and restrictions that drove up housing prices – not to mention a lax approach to foreign speculation – has put Ontario in a very dangerous situation. Instead of being reliant on real, tangible production of goods, they are at the mercy of the housing market – which is not a good place to be.
And as if on cue, the Toronto Real Estate Board reports that home sales in Toronto are down 37% from the same time last year.
As noted by Bloomberg, “Home sales in Canada’s largest city slid 37 percent to 7,974 in June from the prior year, the third straight decline and the most since January 2009, the board said. Owners flooded the market with properties, with listings up 16 percent to 19,614.”
While home prices in Toronto are still up 6.3% in the past year, they have actually fallen in the past three months by 14%. They now stand at $793,915. Additionally, sales are forecast to decline overall in 2017. Bloomberg notes, “The real estate board cut its sales forecast for this year. It now sees transactions in the range of 89,000 to 100,000 units, down from a January forecast for as many as 115,500. The new forecast represents a decline of as much as 21 percent from last year.”
Prices may still fluctuate up and down for some time, but the decline in the past three months and future projections shows the danger of Ontario relying on their housing market for economic strength.
So, what is the solution?
Clearly, Ontario can’t keep relying on the housing sector, and it is inevitably going to come down big time, either through a collapse or a more orderly decline.
That means the province must revitalize consumer demand and manufacturing. And if we set aside the globalist ideology, that is quite simple to do. Repealing so-called “green energy” policies, eliminating regulations that constrain manufacturing, cutting taxes for middle income and working class people, and getting rid of home-building restrictions would all help offset the impact of a declining housing market.
If combined with fiscal restraint on the government side – unlikely under the Wynne Liberals – those policies could even generate stronger and more sustainable economic growth combined with a truly balanced budget.
Of course, that would require a new government in both Ontario and Canada. Both Trudeau and Wynne are part of the elitist ideology that seeks to damage homegrown industries while enriching banks and the corporate elite. They will never back down from their destructive policies, which leaves defeating them as the only option to protect our economy and our economic future.
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