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Homes backing onto the BraeBen Golf Course in Mississauga, Ont. are photographed on May 15 2012. Torontonians are increasingly heading to the suburbs and further afield.Fred Lum/The Globe and Mail

Torontonians are increasingly heading to the suburbs and further afield, driving up sales in Niagara, St. Catharines, Burlington and Hamilton, as they search for more space after months of being cooped up in their condos and relatively tiny homes during the pandemic.

“They’re coming down to Niagara in droves,” said Karl Vanderkuip, a realtor with UP House Realty Brokerage who has worked in the region since 2004.

Before the coronavirus pandemic hit in March, Toronto’s real estate market was overheating with unrelenting demand for housing pushing up home prices, as well as rents. But after governments restricted activity to limit the spread of the virus and most of the city’s office labour force was forced to work from home, Toronto residents began to look for other living arrangements.

With many detached houses in the Niagara and St. Catharines region below $500,000, the area had already been a hot spot for investors looking for a way into Ontario’s real estate market. Now, the prices increasingly seem like bargains for buyers from Toronto, where detached and semi-detached houses sell for in excess of $1-million.

The home price index in the Niagara region, an industry calculation of a typical home with three bedrooms and two bathrooms in the area, was $456,400 in May.

Mr. Vanderkuip said he is getting more calls from Toronto realtors and their buyers who are seeking larger properties. “If I were to have 10 phone calls, maybe two would have been an out-of-town realtor. Now, it is like every other call is an out-of-town realtor,” he said. His brokerage’s sales last month were about the same as June, 2019, because of what he called “significant” interest from Toronto buyers.

A similar story is playing out in other cities outside of Toronto, including Hamilton and Burlington, which are about a one-hour commute by car from downtown Toronto with little traffic.

Conrad Zurini, owner of Re/Max Escarpment Realty Inc. and Re/Max Niagara who has worked in the region for more than 25 years, said home buyers are “going crazy,” for four-bedroom houses. “If you are both working from home, you can imagine it is disastrous,” he said.

One of his Toronto clients is looking for a townhouse in Burlington. The couple have been working from home in their 700-square-foot condo in Toronto and want more space. “They don’t want to live in 700 square feet,” he said. “If you only have to drive in once or twice a week to Toronto, why stay in a downtown condo,” he said.

Shopify Inc., a major office tenant, shocked landlords this spring when it said its work force could continue to work from home permanently. Other companies that lease office space are also telling their employees the same thing, which means more Torontonians can live further from the office without facing long daily commutes.

“I believe many people who could not work from home before will now be able to, or at least part-time,” said Kathy Della-Nebbia, president of the Realtors Association of Hamilton-Burlington, adding that buyers have said they are moving to the area because their employers have decided to allow them to work from home. “This takes away the commuting barrier that exists for some,” she said.

Sales in the Hamilton-Burlington area were flat in June compared with the same month last year but up sharply from May. The average selling price of a home hit $675,223 last month, a 13.7-per-cent increase over June, 2019, and 3-per-cent higher than May.

The benefits of living in the city have faded for some Torontonians, with restricted gatherings temporarily halting most forms of entertainment, including concerts, indoor restaurants and professional sporting events.

Mr. Zurini said his clients want their homes to be their entertainment option, in addition to the place where they eat and sleep. He tracks sales of detached houses with swimming pools and said those properties are selling faster and at much higher prices compared with this time last year.

The fear of a second wave of coronavirus cases and another lockdown is also motivating people to look for more space.

Noëlla Ingabire, a realtor with Re/Max Condos Plus, said her Toronto clients are looking for properties with rooms for an office as well, and their own balcony or garden. “People are looking for space, backyards, just in case there is a second wave, they don’t want to be stuck inside the house,” she said. “Even with condos, we are seeing people try to get something with a balcony or a terrace.”

One of her condo listings without a balcony had no showings. One of her clients, a couple with a young child who live in a two-bedroom condo in the city, are now telling her they want to live in a house with an office.

In the Niagara region, Mr. Vanderkuip said the Toronto demand is mostly from two types of buyers: Homeowners who had a five-year plan to sell their Toronto properties for a hefty profit and relocate to a picturesque and cheaper region; and city dwellers looking for “affordable green space.” Since mid-May, he said it feels like every sale involves multiple offers and houses sell within a week, which is unusual for Niagara.

Although sales in Ontario are rebounding from April lows, the volume is still below normal levels. A reduction in the number of properties for sale has dramatically increased competition among buyers.

In downtown Toronto – the largest real estate market in the country and the second-priciest market after Vancouver – properties are selling within a week of being listed and are drawing multiple offers and bids well over asking.

“People are really re-evaluating their lives,” said Christopher Alexander, Re/Max’s regional director for Ontario and Eastern Canada. “If their companies have decided that remote work is going to stay, they are thinking ‘well I don’t need to be in Toronto or in the downtown core. I can move to a suburb because I won’t have to commute as often.’ That is happening and it will cause a really busy market for the remainder of the year.”

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