Toronto’s housing market is in a “classic bubble” similar to that seen in the US in the middle of the last decade.

That’s the view of wealth management firm Gluskin Sheff’s chief economist David Rosenberg who said that those who are not accepting the existence of the bubble have their “heads in the sand.”

He told BNN that housing is not an equity or a bond but “where people live” and that the high prices in Toronto are becoming a social issue. Rosenberg is convinced that foreign investors are driving up prices and backs taxation to curb the demand.

The economist has an interesting take on the prospect of a price correction, telling BNN: “There used to be time when you’d think ‘wow, a 30 per cent decline in home prices, how terrible that would be.’ That would just take you back to where we were a year ago.”

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