Commuter reach now extends past Kitchener-Waterloo and Guelph into St. Catharines-Niagara
CBC News Posted: Jan 24, 2017 3:28 PM ET Last Updated: Jan 24, 2017 3:28 PM ET
High house prices in the Greater Toronto Area are spilling over into nearby markets, especially those within commuting distance, according to the latest report from Canada Mortgage and Housing Corp.
The average house price in Kitchener-Waterloo is now just under $500,000.
- Toronto buyers drive up Kitchener-Waterloo, Cambridge, Guelph real estate
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But the GTA effect on housing markets may be expanding farther afield than Kitchener, Guelph and Hamilton.
Historically, prospective homebuyers who have found themselves priced out of the GTA have migrated to Hamilton, Barrie and Guelph to buy single-family homes, according to CMHC.
And market valuations in these nearby cities are linked to prices in the GTA, the report shows.
The federal housing agency now notes that recently people have been moving even farther out, especially to the St. Catharines-Niagara region.
As the price of low-rise homes in the Toronto area has soared, house prices in nearby communities like Hamilton, Barrie and Guelph have also been driven up, said Jean-Sebastien Michel, principal of the market analysis centre at CMHC.
According to CMHC, Hamilton – roughly 70 kilometres from Toronto – is the Ontario market that’s most sensitive to housing prices within the Greater Toronto Area.
The report estimates that a one-per-cent change in GTA house prices could increase or decrease Hamilton prices by two per cent after three years.
A $10,000 change in GTA house prices could translate to about $17,000 in Kitchener and Guelph after three years, the report calculates.
Tim Hudak, CEO of the Ontario Real Estate Association, says the lack of supply is the main factor behind soaring detached home prices in the GTA.
“The best way to ensure young families and first-time buyers have a shot at buying a home is by putting more homes on the market,” Hudak said in a statement.
“One way to increase housing stock is to allow developers to build more ‘missing middle’ housing types, like townhomes, duplexes and stacked townhomes. Increasing the housing stock is necessary to give buyers more options at affordable levels, in areas that make sense for them to be in.”
With files from The Canadian Press