Toronto’s Urban Exodus: Where GTA Home Buyers are Going
January 22, 2021
It isn’t news that home buyers have been leaving the Greater Toronto Area (GTA) for years in search of affordable housing. With the average price of a detached home coming in at $1,240,632 in December 2020,1 the comparatively less-expensive Oshawa, Barrie and Hamilton have been the perennial favourites for the GTA’s house-hungry commuters.
What’s changed is that since the pandemic, the work-from-home phenomenon has made commute times in and out of the city less of a concern. As a result, Torontonians are flocking to find affordable housing in more rural parts of the province in what’s being called an “urban exodus.” With continuing demand for more space and bigger houses to accommodate lockdowns and social restrictions, Southwestern Ontario is becoming a top destination for Toronto’s diaspora.
In search of greener pastures
Statistics Canada recently reported that some 50,375 people left the Toronto census metropolitan area (CMA) from July 2019 to July 2020 – the highest population outflow in 20 years. Positioning the exodus squarely in the context of the COVID-19 outbreak, they note that three major factors causing people to reconsider “living in large urban areas hardest hit by the pandemic” are “[p]ersonal health, the ability to work remotely, and higher housing costs.”2
At the same time, the report documents which neighbouring CMAs saw increases in their population growth rates, inferring that Toronto’s wayward workforce is settling in these regions. As expected, northerly Barrie placed highly and Oshawa topped the list, but the second-fastest-growing Ontario population was the Southwest’s Kitchener-Cambridge-Waterloo (a CMA comprised of three cities, also known as the Tri-Cities), while both London and Guelph ranked above Toronto.3
What the markets tell us
While sales across the province have been strong since the first lockdown ended last spring, the influx of GTA buyers to Southwestern Ontario has left the Tri-Cities, Guelph and London with some of the lowest inventory levels and tightest markets in the province.4
According to Blair Campbell, president of the London and St. Thomas Real Estate Association (London being the farthest from Toronto at around two hours’ drive), “[w]e've had really high levels of demand,” and “part of that is buyers coming from out of town, largely from the GTA."5
Similarly, Kitchener-Waterloo Association of REALTORS® 2020 president Colleen Koehler observed in October, “we are seeing strong demand from GTA buyers” because “what people want and need in a home, and where they want to be located, has been redefined in a very short period.”6
As for Guelph, numerous industry observers note the region’s newfound attractiveness to Toronto house hunters,7 while the newspaper Guelph Today recently estimated that almost half of the buyers in the region are from the GTA.8 Though the Guelph and District Association of REALTORS® doesn’t name GTA buyers specifically in the latest market report, its president, Sabrina Essery, asserts that strong buyer demand and the lowest number of available homes in 30 years “are sustaining the tightest market conditions our region has ever experienced.”9
Clearly, Torontonians untethered to the city are finding greener pastures southbound on the 401.
Goin’ up the country
The next question, of course, is what these cities and their surrounding rural communities have to offer.
Aside from having urban cores with all the usual benefits like shopping, dining, and entertainment, each of the three regions has plenty of small-town charm: access to sweeping country views, outdoor activities, and farmer’s markets (both Kitchener-Cambridge-Waterloo and Guelph boast of their connection to the St. Jacobs Mennonite Farmers’ Market). They’re all home to reputable colleges and universities, too.
And they’ve been getting some great press lately – all three regions are named in MoneySense’s top 35 places to buy real estate in Canada. Evaluated by their affordability, appreciation rates, and quality of living, Guelph is ranked at number one, London at number two, and the Tri-Cities at number eight.10
But, if space is what buyers are really after, these regions have it: the latest official census data puts the population of Kitchener-Cambridge-Waterloo at roughly 524,000, London at 494,000, and Guelph at just 152,000 – compare that to the GTA’s 5,928,000!11
And if affordability is at the top of your list, you’ll pay around 40% less for a home in any of these areas than in the GTA, though competitive markets are driving prices upward. As of December, buyers in search of a detached house would be looking at an average price tag of $755,618 in the Tri-Cities,12 $615,174 in London,13 and $696,600 in Guelph.14 Still nothing to sniff at, but much more achievable for some.
Without a clear picture of when, if ever, commute times will again factor into home buyers’ decisions, the comparatively low prices and spaciousness of Southwestern Ontario have made it an attractive option for Torontonians wanting to put down roots. In the song “Mushaboom” by Toronto musician Feist, the speaker dreams of buying a home on an old dirt road, musing, “it may be years until the day my dreams will match up with my pay.” Look southwest, and those dreams may come true.
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Planning to buy your first home in 2021? Here’s what you need to know.
1. Toronto Regional Real Estate Board December 2020 Market Report
2. Statistics Canada. Population growth in Canada's large urban regions slows, but still outpaces that of other regions
3. Population growth rate by census metropolitan area, 2019/2020, Canada
4. Kitchener Waterloo Association of REALTORS® December 2020 Market Report, London St. Thomas Association of REALTORS® December 2020 Market Report, CREA: Guelph & District Association of REALTORS® December 2020 Market Report
5. CBC News: Demand for space in pandemic fuels London, Ont. real estate surge for 3rd straight month
6. Kitchener-Waterloo Association of REALTORS® October 2020 Market Report
7. Toronto Storeys: Is Guelph the hottest real estate market in Ontario right now?, blogTO: Real estate agents seeing trend of Toronto homeowners moving to Guelph
8. GuelphToday. GTA buyer invasion increasing pressure on Guelph home prices.
9. CREA: Guelph and District Association of REALTORS® December 2020 Market Report
10. MoneySense. Where to buy real estae in 2020: Top 35 cities.
11. Statistics Canada. Census Profile, 2016 Census.
12. Kitchener Waterloo Association of REALTORS® December 2020 Market Report
13. London St. Thomas Association of REALTORS® December 2020 Market Report
14. CREA: Guelph and District Association of REALTORS® December 2020 Market Report