Increasing home prices in the GTA are having a spillover effect in surrounding cities, according to a recent report.
Skyrocketing single-family home prices in the GTA are encouraging buyers to purchase outside the city, according to CMHC’s latest Housing Markets Insight Report, released Tuesday.
“Our evidence supports that increasing single-family home prices in the GTA are persuading buyers to make purchases in nearby communities like Hamilton, Barrie and Guelph where homes are more affordable than within the city,” Jean-Sébastien Michel, principal, Market Analysis Centre, at Canada Mortgage and Housing Corporation, said. “In turn, this is driving up house prices in these neighbouring markets.”
That effect has been felt in Hamilton, Barrie and Guelph over the past few years. More recently, however, more far-flung markets are also seeing the effect.
Especially in St. Catherines-Niagara, according to CMHC.
“Except for the clear but short decline in many centres in 2008, house prices have steadily increased in most Ontario CMAs over the past twenty years, with even higher growth rates in the last five years,” CMHC said. “Overall, this substantial increase was due mainly to favourable economic conditions, population growth and relatively low mortgage rates, which increased demand for housing and drove up prices.”
Since the recession, Toronto real estate has been appreciating and a much faster pace than its surrounding CMAs.
However, it appears surrounding markets are starting to benefit from the country’s hottest housing market.