Consumer homebuying patterns move west in the GTA
Migration patterns of residential homebuyers in the Greater Toronto Area (GTA) have shifted west, with market share rising in Halton Region and West Toronto between 2013 and 2018, according to a report released today by RE/MAX of Ontario-Atlantic Canada.
RE/MAX of Ontario-Atlantic Canada analyzed sales trends in nine Toronto Real Estate Board (TREB) districts/regions over the past five years. Halton Region – comprised of Burlington, Oakville, Halton Hills and Milton -- captured 10.1 per cent of total market share in 2018, leading with a 2.3-per-cent increase over 2013, while Toronto West climbed almost one per cent to 10.5 per cent. Toronto Central rose close to two per cent to 18.7 per cent of total market share, while Simcoe County jumped 0.6 per cent to 3.1 per cent. The gains came at the expense of perennial favourites such as York Region (down 3.2 per cent from 2013, to 15.3 per cent), East Toronto (slipped 1.7 per cent, to 9.3 per cent in 2018), Peel Region (fell 0.5 per cent to 20.6 per cent) and Durham Region (down 0.3 per cent to 11.5 per cent of the overall market). Dufferin County remained stable over the five-year period.
"Growing demand for affordable housing buoyed new construction and contributed to rising market share in Halton Region over the five-year period," says Christopher Alexander, Executive Vice President, RE/MAX of Ontario-Atlantic Canada. "Product was coming on-stream at a time when the Greater Toronto Area (GTA) reported its lowest inventory in years and skyrocketing housing values were raising red flags. Freehold properties in the suburbs farther afield spoke to affordability."
In fact, the quest for single-detached housing at an affordable price point have sent throngs of Toronto buyers into the Hamilton housing market over the past decade. The spillover effect has stimulated home-buying activity in most areas flanked Toronto's core and Hamilton. Burlington, in particular, has soared between 2013 and 2018, with home sales almost doubling and average price climbing 50 per cent to $769,142.
The upswing in new construction has contributed to the changing landscape. New housing starts in Halton Region averaged 3,100 annually between 2013 and 2016.* In Simcoe County, an area just north of Toronto, new residential builds averaged close to 1,860 annually from 2013 to 2017.*** During the same period, almost 39,000 residential units came on-stream in Toronto's Downtown/Central Waterfront area, while another 56,855 were active (approved with building permits applied for/issued and those under construction). Another 6,000 units came on the market in North York and Yonge-Eglinton.**
In Toronto's west end, affordability has been a strong impetus, helping millennials redefine tired neighbourhoods like the Junction, South Parkdale, Bloorcourt and Dovercourt Park through gentrification. Average price for the 8,000 plus homes sold in 2018 hovered at $755,658 – although the 10 districts within Toronto West range in price from $557,000 in Downsview-Roding, Black Creek, and Humbermede (W05) to$1,200,299 in Stonegate-Queensway (W07).
"Freehold properties remain the choice of most purchasers in Halton Region and Toronto West," says Alexander. "The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground. Just over one in three properties sold in the GTA was a condominium in 2018 and that figure is higher in the core. As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass."
Toronto Central has seen rapid growth over the past five years, with millennials playing an active role in the marketplace, fuelling demand for condominium apartments and town homes in developments like City Place, King West Village, andLiberty Village. This cohort has also been instrumental in the gentrification of Toronto Central neighbourhoods such as Oakwood-Vaughan and Dufferin Grove as they snap up smaller freehold properties at more affordable price points.
Baby boomers have also been a major influence in Toronto Central, selling larger homes throughout the GTA and making lateral moves or downsizing to neighbourhoods where shops, restaurants, and amenities are all within walking distance. Close to 15,000 properties were sold in 2018, with average price of$932,416, up almost 40 per cent since 2013. Properties within Toronto Central averaged 20 days on market and ranged in price from $709,660 in Bayview Village(C15) to $2,505,461 in York Mills, Hogg's Hollow, Bridle Path, and Sunnybrook (C12).
With an affordable average price point of $611,628 – and a range of $528,942 to$746,332 – younger buyers as well as empty nesters and retirees have flocked to Simcoe County in recent years. New construction in the county, comprised of Adjala-Tosorontio, Bradford West, Essa, Innisfil, and New Tecumseth, has allowed the area to capture a greater percentage of the overall market between 2013 to 2018.
The tide is always turning
"As the millennials move into their homebuying years, they will displace baby boomers as the dominant force in the GTA's real estate market," says Alexander. "Their impact on housing will have a serious ripple effect on infrastructure in the coming years, placing pressure on transit systems, roadways, local economies and their abilities to attract investors and new businesses, parks and greenspace development."
The upswing in demand over the next decade is expected to re-ignite homebuying activity in Toronto East, York, Peel, and Durham Regions. These areas still carry significant weight, despite the factors that have impacted softer performance in recent years, including affordability, lack of available housing, and fewer transit options. "The market can and does change on a dime," says Alexander, adding if there's anything that's certain in real estate, it's that the tide is always turning."
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