While average prices have come down a little since then, they're still well ahead of where they were before the pandemic. Prices that go up forever may make homeowners sleep soundly in their heavily leveraged bedrooms, but many of those paper gains are built on a foundation of debt.
There aren't just more mortgages than ever out there — they're also bigger than ever, too. That's also the highest level on record, and an increase of 20 per cent compared with where we were a year ago. Rebecca Oakes with Equifax told CBC News that this surge of new home loans could become a problem if and when rates rise. Adam Eljerbi owns a number of homes in London, Ont. In an interview, he said he thinks buyers in some markets may be getting in over their heads because of a need to "keep up with the Joneses," as he put it.
He's a landlord, and makes his money fixing up homes in disrepair and renting them to reliable tenants: students. He lives frugally, in his parents' home in Barrie, Ont. Even before he lived with his parents, he rented a basement apartment in Toronto while working in finance on Bay Street. I'd pack my lunches. I'm very, very cautious [with] the money that I spend," he said. Even before the current run-up in prices, buying in Toronto never made sense to Eljerbi, but he's comfortable with debt on his properties in more affordable markets because the numbers work: buy a fixer-upper, improve the housing stock, find reliable tenants, repeat.
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