The Greater Toronto housing market is having a spillover effect on neighboring markets and the present concern is what would a crash in Toronto real estate mean for other Ontario market?
Reports from the Canada Mortgage and Housing Corporation indicate that any major change in the Toronto housing market will have serious consequences on other Ontario markets.
High home prices in Toronto are driving away buyers and many are heading to neighboring regions which in turn will drive up prices in market.
The prices for single-detached homes are very high in Toronto hence buyers are hunting in markets like Hamilton, Barrie and Guelph and this is increasing home prices in these regions.
This shift in market trends have also being felt by far off markets such as St. Catharines- Niagara which has now becomes Canada’s tightest resale market.
The current spill over form the Toronto market indicates that there are some buyers that cannot afford to buy a home in the Greater Toronto Area and instead are buying home in the neighboring affordable markets. But these, markets won’t be so affordable in the near future as more buyers are flooding into such markets.
From 2015, there was a 23.1% increase in home resale in Toronto with the average price of a detached home at $1,016,145. Furthermore, there has been a short supply of new detached homes while demand is on the increase.
Single detached homes have been a hit on the market, and they are more affordable in regions out if the Greater Toronto Area.
And although the spillover effect might have a negative effect on nearby markets, it might also have a positive effect on such regions as a decrease in the home prices in Toronto market would also bring down the price of homes.