This morning, I am looking at the following chart of average home prices in the Greater Toronto Area:

It’s from this Globe and Mail article.

These are staggering numbers. The average price of a detached home in the suburbs (905 area code) increased 21% year-over-year. In the city (416 area code), the increase was 19.6% YOY. These numbers are almost unbelievable.

The article focuses on low supply (decrease in listings) and high demand. And that is certainly a big part of what’s going on here in this city, as well as in many others.

But of course, the backdrop to all of this is our low / zero / negative interest rate environment.

Larry Summers has a great post on his blog (which I discovered this morning via