Toronto buyers spent an average of 32 per cent more for houses outside the city than residents of the rest of the province, according to new land transfer data, evidence that Torontonians are contributing to the spike in real estate prices in cottage country and smaller Ontario cities.
Throughout the province, house prices are 20 per cent to 50 per cent higher than they were a year ago, with Toronto buyers taking advantage of low interest rates to buy larger properties with green space to ride out the pandemic.
Realtors in cottage country and the smaller cities have long said Torontonians were driving up the prices. New analysis from electronic land registry company Teranet provides the data that show the extent to which city buyers have helped push up prices on residential properties.
When Torontonians bought a house outside of the city in 2020, they spent, on average, $844,000, according to Teranet.
The figure last year for Ontarians as a whole buying a house outside of Toronto was, on average, $638,000, said Teranet, which looked at Torontonians’ purchases since the beginning of the pandemic. The numbers suggest that people from the city have more wealth and pricier tastes, and other buyers are likely forced to look at cheaper properties.
“There are higher-paying jobs in Toronto, so it is easier to go outside Toronto and afford more. That obviously created competition,” said Alexander Kvitnitsky, agent with Justo Brokerage, whose Toronto clients were seeking second properties in cottage country.
In Tillsonburg, prices for detached houses are up 50 per cent, to $526,900 year over year, according to the Canadian Real Estate Association home price index, which adjusts for expensive deals.
“Torontonians have deeper pockets,” said Barb Morgan, owner of Morgan Realty Inc. in Tillsonburg, who has sold homes in the area for more than two decades. “They tend to bid much higher than the local people can afford.”
Ms. Morgan said Toronto buyers typically came with their own realtors, who were accustomed to Toronto-style bidding wars. Multiple offers are now common in Tillsonburg and much of Ontario.
In Quinte, which includes the touristy Prince Edward County, the home price index for a detached house is up 47 per cent to $490,100, and realtors say the Toronto buyer is behind that increase.
“That is the only thing that is driving up prices. There is no ifs, ands or buts,” said Treat Hull, a realtor who has sold properties in Prince Edward County for almost a decade.
The Teranet study, which analyzed mortgage activity in the provincial land registry, found that Torontonians and the rest of the province spent similar amounts if a condo was involved. The study found that a Toronto condo owner spent an average of $523,000 on a condo outside of the city last year, compared to the provincial average of $505,000.
During pandemic lockdowns, interest in condos waned as residents grew tired of spending time in a small, confined space. Demand has rebounded, in part because house prices increased to a level that is not affordable for many Canadians.
The study also looked at the migration of Torontonians and found an increase to the Simcoe region, north of the city and closer to cottage country, as well as Durham, to the east.
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