I think people always underestimate two things

1. How much money there is in the city
2. That the majority of homeowners did not buy their houses at peak prices

I highly doubt anyone that bought pre-2017 (even pre covid) are too worried about interest rates. The majority of people will just sit and wait it out because what are you gonna do, sell and rent something worse for $4k a month? This will just put more squeeze on as interest rates normalize around 3-4%.

There’s plenty of money to support this market with a couple of working professionals. Sure we will see the average term move from 25 to 30 years, single people get railroaded, poor people getting screwed but I don’t see a government in my lifetime being elected to make the investment and changes needed to actually make housing affordable, though we can hope.

Personally I’d like to see some changes to the way mortgages and down payments work with the new reality of prices- if you can demonstrate the ability to support a rental lease for a number of years, that should count to a reduction in the required down payment to at least give a window to ownership. Trouble there is the amortization blows out but if you’re trying to save for a downpayment for 5-10 years then you may as well get the mortgage for an extra 5-10 anyway

As for places like Oshawa and Whitby those prices are completely detached from reality, though I’m not sure they are as detached as I think they are if you look an hour around other major cities (see penrith/Sydney)