The Toronto Real Estate Board released today their forecast for the GTA housing market for 2017. Much to the shock and awe of many, they are predicting an increase in house prices between 10%-16% over 2016 prices, mainly due to the constriction of supply. Activity is also forecasted to stay the same as the past few years with 100,000+ in unit sales.

Why such a bullish forecast when there is so much talk about a housing bubble? It’s simple, supply and demand.

It’s well known that Toronto houses (detached, semi and townhomes) have been lacking in supply over the past many years. Homegrown buyers have been fighting for ever in multiple bidding scenarios when a house comes on the market anywhere near their hopeful budgeted purchase price.

Now with many parts of the world enacting protectionist measures to keep foreigners out, Brexit and the United States for instance. What does this mean for housing costs in a country like Canada which embraces immigration and has played a large part already in fueling the massive rise in housing in two of its biggest markets, Toronto and Vancouver?

House prices will continue to rise as more people who still view Canadian housing as affordable continue to immigrate here, and that is great. It’s often referred to as the Canadian dream (and in past times one that was shared with our neighbours to the south) where you are welcome to come and make a better life for you and your family. Owning a home is part and parcel of the dream!

What seems to be happening to the buyer, who was born in Toronto, educated here then enters the workforce in hopes of one day owning a home? Many are being turned into a generation of renters is what we’ve been hearing about. The housing market is too expensive and too hot to compete in!

For the record, I don’t have a protectionist viewpoint in matters relating to our housing markets. But it does bring up a point of view that can easily paint the bad “foreigner” for driving up housing prices when in reality it’s our Canadian government who set the standards and rules both on who can come in to the country, and who can buy real estate here.

Nonetheless, It will be interesting to see how 2017 plays out in Toronto’s real estate market.