Dreaming of an affordable home just outside Toronto? Dream on
Communities like Hamilton, Barrie, Guelph, St. Catharines and Niagara are feeling the effects, says a new report from Canada Mortgage and Housing Corp.
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Are you banking that your affordable dream home is out there, in a small city within commuting distance of Toronto?
You may have farther to go than you think.
Sky-high house prices in Toronto are spilling well past the suburbs and into the exurbs.
Communities like Hamilton, Barrie, Guelph, St. Catharines and Niagara, where single-family homes were once relatively cheap and plentiful, are feeling the effects, says a new report from Canada Mortgage and Housing Corp.
The report estimates a 10 per cent increase in GTA house prices would spike the going rate in Hamilton — which is the most affected — by 14 per cent over the course of one year. (The reverse would also be true if a housing crunch ever comes along).
Families can’t migrate out much farther and still feasibly commute into the city, said CMHC market analyst Jean-Sebastien Michel.
“There’s a limit,” he said, adding the data shows high prices in the GTA and beyond have spurred a trend of families picking up and moving to even Ottawa and Sudbury, where similar jobs and competitive wages are available but housing is much more affordable.
Paul Kershaw, a UBC professor and founder of Generation Squeeze, which advocates for housing policies to ease the financial burden on young Canadians, said a similar phenomenon has been happening in communities around Vancouver for years.
“We’re the canary in the coal mine,” he said.
When he last looked at the data, in 2014, it took a typical young adult 16 years to save for a down payment in the GTA.
“Nobody has 16 years. Naturally, (buyers) are looking further and further afield,” he said.
But a longer commute has “major costs,” and it’s not just the loss of time and quality of life, Kershaw added.
He said his research, based on data from the Vancouver area, shows that over 25 years, the cost of a two-hour commute can add up to $200,000 – the price of an entire home a generation ago.
“We’re pricing out an entire generation of Canadians,” he said.
That's the average spike in home values across the GTA last year, with typical house prices ranging from $458,200 in Simcoe County to $781,800 in Halton.