Torontonians boost house prices in smaller markets, Royal LePage finds
(Toronto Star, Tess Kalinowski, July 14 2021)
Houses still cost more in Toronto than most places in Canada. But Torontonians haven’t experienced nearly the sticker shock or the injection of capital that baby boomers and an outflux of Toronto-area pandemic house hunters have exported to other, traditionally less expensive, Canadian markets.
Toronto-area home prices rose 18.2 per cent year over year to a median $1.03 million in the second quarter of this year, compared to 25.3 per cent growth nationally in the same period, according to Royal LePage on Wednesday.
Its House Price Survey looked at 62 of the country’s biggest real estate markets and found 89 per cent of them experienced double-digit price gains in the second quarter of this year.
While the sale price of a detached house in the GTA rose 28.2 per cent annually in that period, that growth was eclipsed by smaller centres such as Windsor-Essex, where the same house cost 49.4 per cent more than a year earlier, and Kingston, where sale prices soared 46.2 per cent. In Oshawa and Milton detached houses rose 40 per cent.
The impact on secondary markets is a result of baby boomer migration and an outward migration of big-city residents during the pandemic, said Royal LePage CEO Phil Soper.
“It doesn’t take many people from a city of five million to wander into a town of 100,000 to set the real estate market on fire. Even in bigger cities like Calgary, the influx of buyers from Ontario has lifted the market,” he said.
Ontarians and equity-rich boomers have a certain immunity to high prices in small cities and towns, said Soper. If you go house-hunting in Windsor and see a great property for $1 million, and you know there is going to be competition, it doesn’t feel like that big a deal to throw another $100,000 on your offer if you’ve sold a house in Toronto, he said.
The Canadian housing market has passed “peak price appreciation,” said Royal LePage. But the accelerated prices and heated sales earlier this year have nevertheless prompted the company to revise its 2021 forecast upward a second time.
It is now predicting prices to rise 16 per cent annually by the fourth quarter to a national average of $771,500.
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