“Our jobs need to go back to being boring. Every time in history when you see a subsector of society become popular, it’s usually a warning sign. In the US in 2007, it was real estate agents. What happened within 12 months? Go back to the late 1990s, and the hedge fund tech guys were all the rage. We all know how that ended.”
The same goes for a housing market that could do with a period of sustained calm, Sims said, after the eyewatering price growth witnessed in recent years. Even despite falling house prices in many markets, the MLS Home Price Index still spiked by 14.9% on a year-over-year basis in July, according to the Canadian Real Estate Association (CREA).
Sims believes houses and mortgages have become financial instruments to be traded like chips, exemplified by the fact that price appreciation of a home in hotter markets has often outstripped the earnings of its owner.
“If you look at Toronto, houses were earning more than people up until February,” he said. “So, if you made $50,000 a year at your job, and your house was going up double digits – 10% a year – your house was making $100,000 in take-home money. Your house out-earned you, and that’s not healthy.”
The “weaponization” of the housing market is a bad omen for society, he said, with a clear need to get back to a more conventional understanding of what a home purchase should be for.