Small towns across southwestern Ontario are seeing big increases in housing prices due to house hunters from the city.
Drawn to the single family home that has eluded home buyers in the communities where they live, many are now looking to exurban and rural communities.
Big city buyers scouring real estate listings in places like St Marys, Mitchell, Plympton-Wyoming and Mount Brydges are snapping up the available housing and pushing prices up with it.
“We’re certainly not on par with Toronto or even Kitchener-Waterloo as far as how high prices are going but we’re certainly getting there,” said Sue Fowler, the co-owner of Peak Select Realty Inc in St Marys, Ont.
‘We’ve never seen anything like this’
The veteran real estate agent has seen the price of an average home rise from about $300,000 a decade ago to $626,842 as of November 2021, according to data from the Huron Perth Assocation of Realtors.
In a recent report, its estimated Middlesex County will need 680 new homes to be built each year just to keep pace with the expected rate of population growth. (Mark Blinch/Reuters)
In the last two years alone, prices have gone up 66.7 per cent, with homes selling in an average of 11 days at an average 108 per cent of their listed price.
“We’ve never seen anything like this. It’s incredible. It’s crazy,” she said. “Anything that’s priced under $400, 000 right now is probably a fixer-upper.”
However, finding a fixer-upper is a tall order, Fowler said she’s seen only one resale in St. Marys within the last year. Most people who already live in town are planning on staying put, which means anyone who wants to move into the community of 7,000 is forced to build.
‘A real building boom’
“There’s a real building boom here. We have at least four large developments where houses are going up and selling as fast as the architects can do the drawings.”
“We need more resale homes and I don’t think there’s a community out there that can’t say the same thing.”
With the rise in remote work, exurban and rural areas are starting to look more appealing, leading more people to choose the close-knit neighbourhoods of small communities over the big city.
Ken Patterson, a broker at Exit Realty Twin Bridges based in Sarnia, Ont., knows that first-hand. A transplant himself, he moved from Brampton to Mount Brydges, Ont., in 2018.
“We’re seeing people move to the smaller centres to get out of the city, which has caused, obviously, prices to rise.”
Due to unprecedented demand, Patterson has seen home prices in Strathroy-Caradoc rise anywhere from 50 to 80 per cent since he came to the community three years ago.
“It’s a ripple effect that’s inevitable. We’ve seen it right ot the borders of our province, right to Windsor and right to Sarnia,” he said. “Obviously, that’s not a pace that is sustainable.”
Just as notable is the pace of new construction in the area, which isn’t expected to slow down anytime soon, according to projections from Middlesex County.
In a report written by economists from Watson and Associates, the community will need 680 new homes to built each year just to keep pace with the expected rate of population growth.
Even with more homes, Patterson said prices aren’t likely to come down, especially if locals have to compete with house hunters from the big city.
“They value things differently than people in smaller centres. They sell their million dollar semi-detached in Toronto or the GTA and they see a house for $320,000, $470,000 and now $740,000. They still seem affordable to people.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
