Urban sprawl: The sequel
NIAGARA VOICES
Almost a year ago I wrote a piece about how urban sprawl was affecting the Niagara region, and, sadly, it seems that things are still getting worse.
In the past year house prices throughout Niagara have continued to skyrocket as the Toronto sprawl pushes buyers, especially young people, out of the GTA market and further along the eastwest QEW corridor and beyond.
Recently, a spotlight has been increasingly shone on the Hamilton market, which is positively sizzling, with numerous, sometimes dilapidated, homes now costing buyers $400,000 to $500,000. I’m not a real-estate expert, but even I can say for certain that a house which is more than a century old and has collapsing front steps is not intrinsically worth a half-million dollars. Essentially what this trend means is that people are paying more and getting less.
Some people are celebrating this hot market, calling it a renaissance for the Hamilton and Niagara regions, but should we really be celebrating when people are being forced to stretch themselves further and further (both geographically and financially) just to own a home?
Every financial quarter there are more reports of Canadians carrying record levels of household debt, and much of this debt is for exactly that — the household. The situation is even worse for young people, who now have to contend with both skyrocketing house prices and precarious, often part-time, employment.
Southeast, in Niagara, the situation is slightly better, though people are still paying far more than what they should be expected to for homes. And what are a lot of developers doing? What they always do: Cashing in by continuing to construct new housing developments throughout the region and putting up condos all along the lakeshore. Have a look at the “before and after” of Grimsby at Casablanca Road for a great example of this trend. Oh, and good luck finding the lake behind all those new condos.
Ironically, perhaps the worst part of this situation is that house prices will correct, and judging by reports published by our largest financial institutions, relatively soon. The Canadian housing market is poised on a knife edge, and greed is going to topple the entire thing as it always does. When that happens many people will lose their homes, driving prices back down, which will be a good thing for people who waited for that occurrence but a very bad thing for our economy overall.
In a region such as Niagara, which hasn’t had a booming economy for a long time, this crash will most likely depress the economy even further. I wonder where all the politicians and developers who pushed this “boom” and “prosperity” will be then? My guess is sitting on a beach somewhere, having a cocktail paid for by all the people who just lost their homes.
We’ve seen this situation play out before numerous times throughout the GTA in the past 50 years. Anytime there is a “hot” market, everyone rushes to buy, developers rush to recklessly build everywhere in sight, prices slowly outstrip peoples’ ability to buy and the whole thing goes kaboom.
If Niagara is already feeling the pinch from the Toronto-Hamilton building craze, why make it worse by continuing to allow development in a region perennially struggling to build itself back up after the long, slow decline of the manufacturing industry in Ontario?
Unfortunately, everyone must take a share of the blame here. In the 21st century, when information is at our fingertips and the warning signs are all around us, there is no reason to go through this same cycle over and over again. But good old-fashioned greed is going to make sure history repeats itself, and again those who suffer will not be politicians and developers, because by then the former will have moved on to other things and the latter will be off developing the next hot market. It will be the average home buyer who suffers. Sure, those who waited will then get houses at dirt-cheap prices, but the region as a whole will be worse off.
I’d like to end on a sunny note, but unfortunately I can’t find any silver lining to this situation, especially since the signs are right in front of our face, but we continue to push on, seemingly oblivious to the coming implosion.
Let’s just hope that when the house of cards comes down Niagarans do what they always have: band together to weather the storm. When the storm does come, I hope you have a home to take shelter in.