Move over buyers forced out of major markets
Buyers in and around the country’s hottest markets – Toronto and Vancouver – are being forced out of those major cities in search of affordable housing.
“These buyers, known as move-over buyers, are looking for greater affordability in markets across southern Ontario. In turn, they are driving price appreciation in Mississauga, Brampton, Durham, Barrie, Hamilton-Burlington, Windsor, and as far away as Kingston,” RE/MAX said in its spring report/ “The GTA saw the average residential sale price rise by 29 per cent, up from $675,492 in the first quarter of 2016 to $873,631 during the same period in 2017.”
That same phenomenon is occurring in British Columbia, where markets such as Fraser Valley, Kelowna, and Victoria are experiences surges of buyers forced out of unaffordable Vancouver.
Location is prime driver
“A recent RE/MAX survey conducted by Leger found that when making buying decisions, over two-thirds of Canadians consider the location of a home to be more important than the style or size
of the home,” RE/MAX said.
Other important influences include; access to green space (77%), proximity to work (66%), proximity to retail spaces (65%), and proximity to family and friends (65%) – each ranked higher than home style.
Toronto foreign buyer tax expected to cool market
Similar the impact Vancouver’s tax had on its own market, the 15% tariff on foreign buyers in Toronto is expected to shake consumer confidence and encourage some would-be owners to wait on the sidelines until the full effects are known.
Recovery continues in Alberta
“In Western Canada, particularly in Alberta, slowly recovering oil prices, low interest rates, and US approval of the Keystone XL pipeline project have renewed buyer optimism, particularly among move-up buyers and millennial, first-time buyers who are typically looking to buy condominiums,” RE/MAX said. “The average residential sale price increased three per cent year-over-year in Calgary to $482,065, up from $467,780 during the first quarter in 2016.
“A wide variety of inventory across the market provides good opportunities for buyers in Edmonton, resulting in a 12 per cent increase in activity and stable year-over-year prices to start 2017.”
Foreign buyers reset targets
Costlier investments in Vancouver – and now Toronto – have encouraged foreign buyers to look elsewhere to park their funds.
“Charlottetown and Halifax experienced increased demand from foreign buyers in the first quarter in addition to sustained demand from buyers moving back to Atlantic Canada from other parts of the country to purchase more affordable housing options than what is available in Canada’s larger urban hubs,” RE/MAX said.
Forecasting housing policy impact
5 Highlights from the latest housing report
5 things agents across the country need to know.