Last year, Toronto’s housing frenzy spilled through Southern Ontario and priced locals out of their own market.
Ten percent of homebuyers in the London region were from Toronto, likely the effect of bidding wars and sale prices that far exceeded asking. With considerable home equity built up over years, Torontonians cashed out and moved afield, with the price spread between Toronto and London growing to $550,000 in early 2017, according to a Canada Mortgage and Housing Corp. report.
The report suggested that buyers from the Greater Toronto Area chose to settle in south and north London, and about 30% of purchases were in the luxury segment.
“GTA buyers went straight for the nice luxury homes in desirable neighbourhoods in north and south London,” Amran Wali, a CMHC analyst, was quoted as saying in The London Free Press.
Wali’s assessment was confirmed by Century 21 sales representative Barb Whitney, who told The London Free Press that Torontonians’ impact on the small region was conspicuous. “The Toronto buyers really pumped up the market. It was a phenomena,” she said, adding that they often bought multiple houses to the chagrin of locals. “There are many still looking and they don’t have the cash for a higher offer.”
Sales agents in the London-St. Thomas area had a very remunerative 2017. The average price of homes rose 18%—among the highest in the country—the result of a record 11,293 sales. The average price was, compared to the GTA, a paltry $330,037.
Nine percent of London-St. Thomas buyers were from the Greater Toronto Area—significant considering they only comprised 3% in 2015. The outsized impact is the result of selling their homes in a market that regularly saw houses moved for over $1mln.
Although CMHC doesn’t usually produce reports on markets as small as London, Wali was fascinated by the many conversations he’d had with local agents about the impact a hot market nearly 200 kilometres away could have.
But while 2017 was a hot year for London sales reps, a slew of initiatives, like the foreign buyer levy and the new mortgage rules, not mention rising interest rates, chilled the Toronto market.
“All of that really cooled down the GTA and the price has shrunk, so are seeing fewer buyers from the GTA coming to London,” said Wali.
The simple solution to flood disclosures
Toronto property values to get major boost