Ontario's largest housing markets post significant gains over past decade, says RE/MAX INTEGRA Ontario-Atlantic Region

Housing values double in the Greater Toronto Area and Hamilton-Burlington

MISSISSAUGA, ON, Feb. 7, 2018 /CNW/ - Low interest rates, population growth, investment and unprecedented equity gains all combined to spark one of the strongest decades for price appreciation in Ontario's six largest housing markets, according to the Decade in Review Report released today by RE/MAX INTEGRA, Ontario-Atlantic Region.

Ontario’s largest housing markets post significant gains over past decade, says RE/MAX INTEGRA Ontario-Atlantic Region (CNW Group/RE/MAX Ontario-Atlantic Canada)

Between 2007 and 2017, the six largest markets in the province experienced substantial growth despite some serious challenges that included a financial crisis and subsequent recession. RE/MAX found that housing values more than doubled in the 10-year period in the Greater Toronto Area and Hamilton-Burlington, while average price rose 81 per cent in Kitchener-Waterloo; 63 per cent in London-St. Thomas; 62 per cent in Windsor; and 44 per cent in Ottawa.

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Residential Average Price Appreciation
2007-2017
Market		2007	2017	% change	CAGR*
Greater Toronto		$376,236	$822,681	119	8.14
Hamilton-Burlington		$274,798	$576,418	110	7.69
Kitchener-Waterloo		$252,429	$457,415	81	6.12
London-St.Thomas		$202,908	$330,037	63	4.98
Ottawa		$273,058	$392,474	44	3.69
Windsor		$163,215	$264,750	62	4.96
Source: Local Boards, CREA		*Compounded annual growth rate

"Lower borrowing costs helped to jumpstart the province's real estate engine, creating one of the most dynamic housing markets in recent history," says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA, Ontario-Atlantic Region. "For existing homeowners, especially those who purchased early in the decade, the equity gains realized have exceeded all expectations."   

Tight housing market conditions initially presented in the Greater Toronto Area and neighbouring Hamilton-Burlington, but the ripple effect made its way along the 400-series highways and into markets such as Kitchener-Waterloo, London-St. Thomas, Windsor and Ottawa by the end of the decade.

Housing sales also ramped up during the latter half of the decade, with many markets shattering existing records as demand outpaced supply. The Greater Toronto Area topped 100,000 unit sales in 2015 and 2016; Hamilton-Burlington surpassed 16,000 unit sales in 2015 and 2016; Ottawa reported sales over 17,000 units in 2017; London-St. Thomas crossed the 10,000 unit sales threshold in 2016 and 2017; Kitchener-Waterloo reported sales over 5,000 units in 2015, 2016, and 2017; and Windsor topped 6,800 unit sales in 2016. As inventory dwindled, bidding wars erupted, placing upward pressure on prices.

"While equity gains further bolstered the move-up market, affordability concerns emerged," says Alexander. "Limited inventory was reported in Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Windsor and Ottawa, as first-time buyers, especially those interested in single-detached homes, ventured outside of the Greater Toronto Area. At one point, one in every four buyers in Hamilton-Burlington was from the GTA."

Investment also factored into the home-buying frenzy, with foreign investment climbing as the Canadian dollar tumbled, explains Alexander. The low interest rate environment stimulated domestic investment as well. Ontario's strong economy, firing on all cylinders during the latter half of the decade, served to attract buyers from other provinces. Immigration continued at a steady pace, with the vast majority of newcomers to Canada choosing to settle in Ontario. As a result, population growth accelerated in the province over the last decade, with Statistics Canada reporting a 5.7-per-cent increase between 2006 and 2011 and a further 4.6-per-cent uptick between 2011 and 2016. With 13,448,494 people now calling Ontario "home," the province houses approximately 38 per cent of Canada's total population.

The culmination of the aforementioned factors led to the run-up in values. While Toronto remains the most expensive city in the province, with an average price of $822,681, Hamilton-Burlington runs a close second at $576,418. Both markets have experienced steady upward price appreciation since the mid-1990s and the trend is expected to continue. 

Affordability will play a major role in the future of housing, as buyers seek refuge from higher values in larger centres. At present, Windsor—Ontario's most affordable metropolitan market with an average price of $264,750—London-St. Thomas, Ottawa, and Kitchener-Waterloo all offer single-detached homes at reasonable price points. Sales of condominiums are also gaining traction in these centres.  Improved economic fundamentals, combined with greater employment opportunities, are expected to keep these Ontario housing markets humming.

"This past decade has been exceptional for housing, with the annual rate of return in five of the six housing markets outperforming most other Canadian investment vehicles between 2007 and 2017," says Alexander. "Moving forward, the stage is set for continued growth, but at a somewhat slower pace.  More stringent lending criteria and the new government stress test will present some challenges in the short-term, but we believe home ownership will continue to be top of mind with Canadians in the long run."

About the RE/MAX Network:

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. Over 110,000 agents provide RE/MAX a global reach of more than 100 countries and territories. RE/MAX is Canada's leading real estate organization with more than 19,000 Sales Associates and over 750 independently-owned and operated offices nationwide. RE/MAX, LLC, one of the world's leading franchisors of real estate brokerage services, is a subsidiary of RE/MAX Holdings, Inc. (NYSE: RMAX). With a passion for the communities in which its agents live and work, RE/MAX is proud to have raised more than $150 million for Children's Miracle Network Hospitals® and other charities. For more information about RE/MAX, to search home listings or find an agent in your community, please visit www.remax.ca.

About RE/MAX INTEGRA and RE/MAX INTEGRA, Ontario-Atlantic Canada      

RE/MAX INTEGRA, founded in 1980, is a privately held company by Canadian entrepreneurs. With regional headquarters in Toronto, Boston, Minneapolis, Indianapolis, Zug, and Vienna, RE/MAX INTEGRA represents nearly a third of all RE/MAX Sales Associates worldwide. The company was founded on the premise of providing outstanding service and support both at the regional level and to the end consumer. The Ontario-Atlantic Canada region has surpassed 10,000 quality Associates; The US regions — New England and the Midwest (including the following states: Minnesota, Wisconsin and Indiana) – account for more than 6,500 Associates with over 2,600 and 3,800 Associates respectively; and the European region leads with more than 16,000 Associates. For more information about RE/MAX INTEGRA, visit www.remaxintegra.com

SOURCE RE/MAX Ontario-Atlantic Canada

Melissa Clemance, RE/MAX INTEGRA, Ontario-Atlantic Region, Office: 905.542.2400, [email protected]; Melissa Vekil, Apex PR, Office: 416-934-2127, Cell: 647-244-0425, [email protected]; Eva Blay-Silverberg, Point Blank Communications, Office: 416.781.3911, Cell: 416.505.0627, [email protected]