Former Royal Bank of Canada CEO Gord Nixon is bullish on Toronto real estate.
“I think real estate in Toronto is going to continue to do extremely well,” he told BNN in an interview, prior to being inducted into the Canadian Business Hall of Fame at a ceremony in Toronto on Thursday night.
“The city is growing every year. There is less and less land to develop because of green space. And it has become an incredibly dynamic international city, with lots of activity. You may go through a dip from time to time, but I think the trend is going to be quite positive.”
Nixon earned his induction into the Canadian Business Hall of Fame in part because of his ability to navigate the 2007-2009 financial crisis, which was brought on primarily by risky lending that fueled the U.S. housing boom and subsequent bust.
According to the Toronto Real Estate Board, the average price of a detached home in the Greater Toronto Area rose to $968,437 in April; that’s a 143 per cent increase from the same period in 2008, when the average price of a detached home in the GTA was $398,687.
“As difficult as it is for people trying to enter the marketplace (because it is so expensive), relative to major cities around the world like New York or London, Toronto is certainly not out of line. It brings with it social challenges, but I think the market is in good shape.”
Nixon says it’s important not to lump the Canadian housing market together.
“Comparing what’s happening in Vancouver to Toronto is quite different, let alone Saskatchewan or St. John’s, or other places across the country,” he said.
Nixon also sees Vancouver’s housing market as being driven by a different dynamic than what’s happening in Toronto. “There’s so much foreign activity and investor activity in that marketplace that it’s probably more vulnerable, but that all depends on how attractive Canada continues to be as a place for foreigners to invest.”
Nixon retired from RBC in August of 2014, following a 13-year run at the top of the bank. Along with his current leadership role as chairman of BCE (the parent company of BNN), Nixon also chairs the board of directors for the MaRS Discovery District, Toronto’s innovation hub.
“A lot of bright young people want to become tech entrepreneurs or healthcare entrepreneurs. It’s one of the reasons why I’m constantly amazed at what goes on at MaRS day in, day out. There’s just so much excitement in this city and the Kitchener-Waterloo corridor that continues to be an incredibly important part of Canada’s future.”
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