Househunters hit the road for a better deal

Can’t afford Toronto? Try Barrie. Or Kingston. Or Windsor. Buyers are heading to smaller urban centres — and bringing the prices up with them

Three years ago, you could buy a house in London, Ont., for $234,000. Today, it will cost you $364,000.

“I call it the Toronto migration ” said real estate broker John DeBlock.

“It’s not only from Toronto, though. Toronto people have gone to Kitchener. Kitchener people have come to London.”

The GTA’s housing fever may have broken in spring 2017, but its heat is still dispersing around the province.

DeBlock predicts it will linger for at least another year, and it isn’t confined to London.

In Windsor, realtors are seeing bidding wars on most listings.

In Barrie, 38 per cent of home sales involve an out-of-district realtor, most of them representing Toronto-area clients.

Retirees, move-up and firsttime buyers are looking to get more for their housing dollars by migrating to smaller Ontario markets. Technology and strong provincial employment are helping. Places such as Belleville, Niagara, Kitchener and Cambridge all saw doubledigit price growth in the second quarter of the year, according to a report last month from Royal LePage.

“Does it really matter where you live any more? Technology has increased the mobility of people. They don’t have to live in the community they work in,” said DeBlock, who says Toronto-area clients account for about 40 per cent of his business.

When Toronto-area realtors cheered a 2 per cent year-overyear price gain in June, the London-St. Thomas Association of Realtors reported 10.5 per cent year-over-year growth in London — a 33 per cent increase over June 2016.

Buyers from Brampton or To- ronto can sell “the worst house” for $900,000 or $1 million. In London they can get “the best house” for $600,000 or $700,000, said DeBlock.

He says his clients are happy to dispense with GTA commutes. “They can go an hour and a half to Mississauga, jump on a GO train and be in downtown Toronto in two to twoand-a-half hours and enjoy the ride,” he said.

That’s a better deal once or twice a month than a two-hour commute every day.

DeBlock says the Toronto migration has also placed a premium on waterfront property in once-overlooked communities such as Sarnia, Kingsville and Goderich, frustrating Londoners who want to retire there, too, but don’t have the same equity as Toronto area buyers.

Daniel Hofgartner, president of the Windsor-Essex County Association of Realtors, says a stream of retirees, a dearth of listings — June’s listings represented a decade low — and a surge of investment means 60 to 70 per cent of sales attract multiple offers.

After seeing years of marketing the area’s waterfront to retirees, Torontonians have awakened to the area’s lower prices and milder climate in close proximity to the entertainment at Windsor’s casino and neighbouring Detroit’s attractions, including arts, restaurants, pro sports teams and an international airport.

“The average price two-and-ahalf to three years ago was $180,000 and now i t’s $289,000,” he said. That will buy a three-bedroom ranch with one-and-a-half baths and a single-car garage.

Buyers can get a Kingston house with a yard for about 60 per cent less than in Toronto

“We never saw the 30 per cent increases that Toronto saw. We saw the 10 to 15 per cent increases, which for Windsor is huge,” said Hofgartner. “Windsor, in the past 20 years, has generally only seen the rate of inflation, if that.”

“Say you buy a little house for $160,000 or $180,000. You can rent it out for $1,500 a month. That’s good return on your investment. A Toronto home is four times the amount, and you don’t get four times the rent,” he said.

In Kingston, which also experienced a 10-year low in listings in June, realtor Bob Armer says 10 to 20 per cent of the deposit cheques that come across his desk have a Toronto address signed by two buyer groups: retirees or semi-retired telecommuters, who want the Kingston area’s waterfront lifestyle; and younger buyers who want a house and yard in a city with an economy where they can also find a job.

The city of about 160,000 people is that little bit too far — about 2.5 hours — to take in a Jays game or a concert, he said. But for millennial buyers, the trade-off is a detached house with a yard for about 60 per cent less than in Toronto. A Kingston buyer can get a brand new semi with an unfinished basement or a three-bedroom brick bungalow with a single car garage on a 50-by-120-foot lot for about $370,000.

“We were always too far from Toronto to be part of the party, but over the last two years people decided that because of the amenities and the price point they would come this far,” he said.

“People are coming to take advantage of our cheap housing and, in some situations, they’re finding jobs that pay the same money they would make in Toronto,” said Armer. “Why wouldn’t you?”

Tourism is a mainstay of Kingston’s economy, but other industries are also thriving. Armer cites the recent opening of Portuguese Frulact Group’s dairy and pastry manufacturing facility and a pending initiative by Chinese infant formula maker Feihe International.

The same is true in Barrie where the market has more directly mirrored Toronto’s. But it’s a healthy market returning to normal, said realtor John Weber. There’s good demand for homes in the $300,000 to $600,000 range that appeal to first-time buyers and retirees.

A decade ago, Barrie was mostly a bedroom community and Toronto-area commuters are still in the market. But Barrie’s employment is diversifying into fields such as aviation and fibre optics.

“You don’t have to just live in Barrie and drive down the (Highway) 400 every day. There is better employment here where you can make $60,000 to $80,000,” he said.

In Kingston, Armer recently took a call from a Torontonian who had sold his house for $1.3 million. The guy wanted to know what he could buy.

Armer’s response: “Anything you want.”