Just how far are Greater Toronto Area-homebuyers willing to go for affordable houses? All the way to Niagara Falls, according to the latest data released by the Canada Mortgage and Housing Corporation (CMHC).
The Crown Corporation’s recent Housing Market Insight analysis finds the “spillover” effect from rising GTA home prices now extends as far as the St. Catharines – Niagara region. It also states housing prices in communities surrounding Toronto – anything within commuting distance – are heating up faster than in other parts of Ontario.
“Recent house price spillovers appears to have been occurring a bit farther out, especially in the St. Catharines – Niagara region, driven by GTA low-rise home prices,” states the report.
Demand Is Strongest Price Pusher
Priced-out buyers heading to the suburbs is hardly a new trend; Hamilton, Barrie and Guelph have historically expanded alongside Toronto’s housing demand, supported by population growth, strong economic conditions, and low interest rates. But these traditional factors were eclipsed by the demand for affordable low-rise housing in 2016, which rose 30% in the GTA year over year.
“Recent price growth in the GTA has therefore been at its highest level relative to Ontario CMAs (Census Metropolitan Areas),” stated the report.
Hot Hot Hamilton
Hamilton real estate – which Re/Max predicts will be 2017’s hottest market, and other cities within the Golden Horseshoe are in especially high demand. According to the REALTORS Association of Hamilton-Burlington (RAHB), 416 houses were sold in Hamilton in 2016, a 13.7% increase from the year before, at an average price of $455,460. While this is an increase of 22.2% year over year, that’s practically a song compared to the average price of $1.3 million for a house in the City of Toronto.
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CMHC also found the region is especially sensitive to price fluctuation in Toronto; real estate prices in the Hammer are forecasted to rise or contract by 14% for every 10% in the city proper.
When a Condo Isn’t an Option
These are buyers who, unsatisfied with dwelling in a condo, are up for the drive if it means owning a detached home and yard. “These results suggest that some potential buyers are unable or unwilling to purchase an apartment in the GTA, and are instead choosing to purchase a property in a nearby CMA when GTA low-rise home prices rise,” CMHC states.
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