Here's some math to show why Torontonians don't move....

I have friends in Ottawa with a house roughly equivalent to mine in area and location.  It is worth about $650,000.  Mine in Toronto is "worth" about $2,000,000.

If I were to sell my house and downsize to a house a quarter of a million dollars cheaper - $1,750,000 - after paying commission, GST on commission and double land transfer tax on the new place,  I would be able to keep approximately $49,000 of the $250,000 of equity.  If my friends were to sell their place and move to one a quarter of a million dollars cheaper - $400,000 - after paying commission, GST and property tax, they would retain $203,000 of their $250,000 in equity.  We would have similar houses, but I would have lost almost all my equity.  That would be an idiotic move for me to make.

These high Toronto prices are only good if you are buying out of the city or if you are cashing out and renting.  Otherwise they are a mixed blessing at best.