The Shrinking Middle Class: A Global Perspective on Homeownership - July Edition

JULY 2024

Hello All,

Happy summer, everyone! I hope you're all enjoying the warm weather and making the most of these sunny days. July has been an exciting month for me, with both my birthday celebration and my housewarming party.

I'm thrilled to share some real estate insights with you. This month, let's explore the global housing market trends and discuss how they impact us locally.

Market Analytics

June 2024 home sales in the Greater Toronto Area (GTA) were down 16.4% compared to June 2023, according to the Toronto Regional Real Estate Board (TRREB). Despite a recent Bank of Canada rate cut, many buyers delayed their purchases, leading to a slight dip in the average selling price from $1,181,002 in June 2023 to $1,162,167 in June 2024.

TRREB President Jennifer Pearce noted that buyers might need more rate cuts before entering the market. TRREB reported 6,213 home sales in June 2024, down from 7,429 in June 2023, while new listings increased by 12.3% year-over-year to 17,964.

The MLS? Home Price Index Composite benchmark fell by 4.6% year-over-year, though it showed a monthly increase from May 2024. TRREB Chief Market Analyst Jason Mercer highlighted that ample supply has given buyers negotiating power.

TRREB CEO John DiMichele emphasized the need for long-term solutions to meet Ontario's goal of 1.5 million new homes by 2031, calling for reduced red tape and minimized housing taxes and development charges to support home construction.

Click here for TREBB’s June Market Analysis

Mike’s Perspective

You've likely come across numerous headlines about the lack of affordability in Toronto and Vancouver. This month, I want to broaden the perspective to what's happening globally. One of the key indicators of the middle class has been their ability to own a home. In the 1990s, house prices in all major housing markets, including Canada, the US, Australia, and the UK, were three times or less than household incomes. This balance has been disrupted worldwide. The house price-to-income ratio has tripled across the globe.

I often discuss the growing disparity between the rich and the poor, and this issue is exacerbating that trend as the middle class continues to shrink. This crisis largely stems from land use policies that artificially limit housing supply. To restore affordability to previous levels, should governments consider opening up more land? It's a compelling question, especially given Doug Ford's attempt with the Greenbelt initiative, which didn’t succeed as planned.

Another critical question is whether governments actually want affordability to return to previous levels. Probably not. As the world changes rapidly, I believe we need to rethink some traditional concepts regarding homeownership.

I’d love to hear your thoughts on this. Is the lack of homeownership a result of government policies, or was this trend inevitable in our time? Should we adapt and change our approach to homeownership, or should we demand that governments take action to make prices more affordable?

The Bank of Canada’s next scheduled announcement for the overnight rate target is on July 24, 2024. I will be sure to keep you all updated on what’s happening in the market and give you the inside scoop.

Interested in discussing market analytics in further detail and would like to jump on a call? Feel free to book a call session with me using this link here and I’d be happy to chat with you. Have a great rest of the month!

- Mike

Check out these Listings for Sale!

10 Landbourough St

3 Bed | 3 Bath | 2 Parking

Listed for: $689,999.00

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212 - 225 Richmond St E

1 Bed | 1 Bath ? ?

Listed for: $615,000.00

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My Top 5 Restaurants to Eat at in Hamilton

(Click the Link in the Title for their Website)

1. Quatrefoil - Quatrefoil Restaurant offers contemporary French cuisine in the historic town of Dundas, Ontario. Now in our tenth year we are humbled to be able to continue to provide our guests with splendid food, wine and service.
2. Born and Raised - Located on James Street North in Hamilton’s lively Art Crawl district, Born & Raised nestles in the heart of the action amid modern art galleries, charming boutiques, cozy cafés and old-fashioned mom ’n pop shops. ?
3. Aberdeen Tavern - Aberdeen Tavern is a big city dining experience, steeped in warm hospitality set in a beautiful old bank setting. With comfort food as our primary focus, our kitchen team works closely with local farmers and sustainable food importers to ensure the highest of quality is never compromised.
4. HAMBRGR - Whether Downtown or at Crown Point, you're guaranteed a fine burger thanks to the HAMBRGR crew. They get their meat from local farmers and have an infectious passion for beef patties. Not for a classic burger, that's for sure.?
5. Berkeley North - Berkeley North is a contemporary dining space, the ideal setting for West Coast-inspired small plates made with locally sourced ingredients. The sleek black and white design, exposed brick walls, potted plants and a garage-style door that opens in the summertime add even more character to the experience.

Michael Boateng Sales Representative

With a background in real estate investing, mortgages, banking and sales, Michael Boateng is an experienced, dedicated and hard working real estate agent that will not only put you first in your quest to purchase a home but, he will also provide you with the knowledge necessary to make the right decision for yourself and your future.

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