Gnashing of teeth and rending of garments followed the news that the average price of a detached home in Toronto has jumped above $1-million for the first time. Online forums lit up with outrage.
It's all down to those dastardly Chinese investors, one reader said. My kids will have to live in my basement till they're 40, another said. Who would want to buy a house in that hell hole called Toronto anyway, yet another said.
Steady on, now. The rise of real estate values is based on more than just crazy speculation or vulture investing. Although rock-bottom interest rates have certainly fuelled the boom, not just in Toronto but across the country, it says some good things about the city and its evolution.
The first is that people want to live in this city. Hundreds of thousands are coming from around the world to settle in Greater Toronto, and that creates high demand for housing. Big cities around the world, from New York to London to Hong Kong, have seen house prices take off. Toronto is fortunate to be one of those urban magnets.
The second is that people want to live in the city centre. The flight from downtown has gone into reverse. The term "inner city," which used to mean the hollowed-out, down-at-heel core, is becoming obsolete. People will pay a big premium to live near the centre where the action is.
Toronto is lucky enough to have a wealth of stable, attractive central neighbourhoods. It's no wonder houses in them are worth a fortune. Demand is high, supply finite. As Will Rogers might have said, single-family housing in central Toronto is valuable because they aren't making it any more.
Not all the fruits of the real estate boom have gone to latte-sipping BMW drivers. All sorts of others who happen to own houses in gentrifying neighbourhoods – older immigrants, retired people, families of modest means – have seen their net worth soar. Many have cashed in, moving to condos or settling out of town.
It is a challenge for young people to get into the housing market, as it always has been. A detached central house is out of reach for most of them. But, then, the same could be said of young people in San Francisco or Boston, not to mention Vancouver.
Fortunately, there are now alternatives. The condominium boom has put tens of thousands of new dwellings on the market at a reasonable price. An average condo goes for about $370,000 in the 416 area code. A townhouse costs about $510,000.
Although it may be hard to get into the housing market, it's not impossible. A chart put together by Global News shows that, among those from the ages of 25 to 34, the rate of home ownership in Toronto has actually gone up, from 52.7 per cent in 1991 to 64.4 per cent in 2011.
Renting is an option, too. Canadians prize home ownership, but in many world cities, renting is the norm. As real estate prices rise and more people look to rent, developers are rushing to meet the anticipated demand by building rental projects. The proposed new complex on the Honest Ed's site is to be rental only.
For those who still yearn to buy a house in Toronto, there is at least one consolation. Just because house prices are going up now and have been going up for some time doesn't mean they will keep going up forever. The boom of the late 1980s was followed by the slump of the 1990s. Real estate, even in solid places like Toronto, is as volatile as any other commodity. What has gone up could come down.
In the meantime, we should learn not to hyperventilate about rising house prices. They are the sign of a thriving city.