Liveability in Canada's Small Markets Eclipses Relative Affordability
RE/MAX Canada brokers and agents anticipate residential price growth across all small markets analyzed, with average increases ranging from three per cent up to 20 per cent in some areas
- Quality of life factors (or liveability) are drawing many Canadian homebuyers to small markets (40 per cent); followed by housing affordability (37 per cent)
- More than a quarter of people living in larger markets (28 per cent) would like to move to a smaller market in the next two years
- A quarter of Canadians (25 per cent), have received family support to purchase their first or current home; this number is consistent in large and small markets
TORONTO and KELOWNA, BC, April 13, 2022 /CNW/ -- A new report from RE/MAX Canada finds that "small markets" are attracting new residents and homebuyers primarily for the liveability factors that they offer, such as green spaces and neighbourhood dynamism, to name a few*, ahead of affordability by a slim margin. The 2022 Small Markets Report analyzed home sales and price trends in Canada's fastest-growing small markets, which are defined as those with the highest population growth rates in 2021, and having a population of less than 440,000, with secondary markets below 100,000**.
Residential prices in these communities have continued to rise as a result of low inventory and growing demand. RE/MAX Canada brokers and agents anticipate residential price growth across all small markets analyzed, with average increases ranging from three per cent up to 20 per cent in some regions through the remainder of 2022. Unsurprisingly, some of these markets have already experienced significant year-over-year price appreciation in the range of 17 to 38 per cent.
Activity in these communities has been fuelled in part by the financial support that many Canadians have received from family, with 25 per cent of Canadians using financial support from family in order to purchase a home, according to a Leger survey commissioned by RE/MAX Canada. RE/MAX Canada brokers and agents in 83 per cent of regions surveyed have also witnessed this trend locally, specifically among first-time homebuyers.
"Liveability is all about quality of life, and as we all work toward getting back to enjoying the things we love the most about our communities, it's not surprising that it ranks so highly in importance for Canadians – especially now," says Christopher Alexander, President, RE/MAX Canada. "Despite the fact that the national housing market still has challenges to overcome, smaller communities are viable options for Canadian homebuyers looking for the right balance between liveability and affordability. The increase anticipated for home prices for the remainder of 2022 by our network of brokers and agents is a good indicator of the appeal of these communities."
However, the desire for liveable communities plays both ways, with more than half of smaller market residents (57 per cent) voicing concern that the distinct liveability qualities of their town ─ its charm ─ may be eroded as a result of rising demand from move-over buyers. And many (43 per cent) share the same anxiety about rising prices, feeling that they could potentially be priced out of their community, if the trend persists.
According to the Leger survey, during the pandemic, nearly a quarter (23 per cent) of Canadians moved from a larger market to a smaller one, and they're largely happy about the move (85 per cent); while half of Canadians that moved to a small town believe their mental health has improved after moving to a smaller community (52 per cent).
"We've seen a greater influx of buyers moving to smaller markets over the past two years, a trend that's prompted some concern among existing residents. However, the diversity of new homebuyers can be a positive thing for local communities," says Elton Ash, Executive Vice President, RE/MAX Canada. "The recent notable growth of Canada's small markets makes it an opportune time for municipal and provincial governments to focus on alleviating these concerns through measures that address affordability and housing supply, but also aim to revitalize and improve community liveability that has made these regions the preferred choice of many Canadians."
This keen interest in small towns doesn't seem to be waning, as gathering and workplace pandemic restrictions continue to ease across the country, and more Canadians return to their office settings on a full-time or hybrid basis. According to the Leger survey, Canadians' ability to work from home has motivated them to move to a smaller community (14 per cent); with 11 per cent indicating that should their employer required them to return to work in-person, they would look for another job so they could remain in their small city/town/community.
A regional deep dive into Canadian small markets
RE/MAX Canada brokers and agents were asked to provide an analysis on their local market activity for the first quarter in 2022, as well as an outlook for the remainder of the year.
Atlantic Canada
RE/MAX Canada surveyed brokers in Moncton, NB, Charlottetown, PEI, Summerside, PEI, Truro, NS and Halifax, NS and found that they are all sitting is seller's territory due to low inventory and insatiable buyer demand, which is expected to continue through the remainder of 2022. These regions are anticipating average sale price increases of 5.5 per cent in Summerside; 12 per cent in Charlottetown; 15 per cent in Moncton; 19 per cent in Halifax; and 20 per cent in Truro.
Across Atlantic Canada, out-of-province buyers are driving sales activity due to relative affordability compared to large city centres in other provinces, with buyers most interested in detached homes that offer more living space and, in some cases, water-front properties. Between January and March of 2022, year-over-year average residential sale prices have increased 38 per cent in Moncton (two per cent population growth); 26 per cent in Halifax (2.1 per cent population growth); 22 per cent in Charlottetown, and 20 per cent in Summerside (two per cent population growth).
RE/MAX brokers and agents in Atlantic Canada anticipate their markets to continue to be sought after by out-of-province buyers, and in some cases new immigrants, as the pandemic has shifted what people want in a home. Specifically, there is a newfound appreciation for smaller communities across Atlantic Canada.
Ontari
All of the small markets surveyed in Ontario are seller's markets with low inventory and high demand. Average residential sale price estimates according to RE/MAX brokers and agents, include Stratford (eight per cent); Centre Wellington (two per cent); Grand Bend (7.5 per cent); Woodstock (eight per cent); Southern Georgian Bay Area (nine per cent); Oshawa (15 per cent); Arnprior (15 per cent); and Carleton Place (15 per cent).
Throughout the pandemic, local RE/MAX brokers have reported an influx of out-of-town buyers seeking affordable housing, larger living spaces and a close-knit community feel. Many of these regions, including Oshawa, Carleton Place, and Arnprior, already have the infrastructure and public transportation in place, offering residents an easy commute to work in the city.
The cities of Oshawa (2.3 per cent population growth), Arnprior (2.3 per cent population growth) and Carleton Place (3.8 per cent population growth) in Ontario are each anticipated to see average sale prices increase by 15 per cent through the remainder of 2022, according to RE/MAX brokers and agents. Carleton Place was recently named the fastest-growing community in Canada, which is also impacting its housing market. It currently has multiple new developments in the works, which will bring in more than 1,600 new homes to the area.
Western Canada
Much like the rest of the country, Western Canada's small markets continue to favour sellers, including Kelowna, BC (2.6 per cent population growth), Chilliwack, BC (2.3 per cent population growth), Cranbrook, BC, Brooks, AB, Red Deer, AB; and Brandon, MB. Many of these regions are welcoming buyers from other regions and provinces (primarily Ontario), with interest in single-detached homes that offer more indoor and outdoor living space. Over the past few months, these regions have seen stronger buyer confidence and less urgency to purchase a home. This has resulted in fewer bidding wars and is signaling that the market is beginning to settle; however, it is too early to predict indefinitely.
Territories
This report also analyzed the region of Whitehorse in the Yukon (2.4 per cent population growth), which is currently a seller's market that is anticipated to continue for the remainder of 2022. In this region, condos and townhomes are seeing the most activity, both in terms of sales and new construction. However, supply cannot keep up with the demand, and is driving prices up. Whitehorse has been a hotspot for new immigrants in particular, with municipal programs in place to help them integrate into the community. The region is also seeing out-of-province buyers who are falling in love with the lifestyle of the North.
About RE/MAX Canada's 2022 Small Market Report:
The 2022 RE/MAX Small Markets Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents were surveyed on market activity and local developments based on local board data and market activity in 2021 and 2022. *Liveability as defined by the Leger survey respondents, was based on individual subjectiveness for what liveability meant to them. Liveability as defined by RE/MAX is the quality of life that make up your neighbourhood, such as green spaces, transportation, etc. to name a few. **Small markets were defined as those having the highest population growth rates in 2021, according to Statistics Canada, and population under 440,000, with a secondary criterion in order to ensure a good sample of national markets of those with a population of 100,000 or less.
About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,525 Canadians was completed between March 25-27 using Leger's online panel. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children's Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward looking statements
This report includes "forward-looking statements" within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company's business, the Company's ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company's ability to attract and retain quality franchisees, (6) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company's ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company's ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
SOURCE RE/MAX Canada
Danielle Scott, [email protected], 416-909-5185; Lydia McNutt, [email protected], 905-301-5980
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