Big Real Estate Boom Hits Canada’s Small Cities & Big Towns

Source – theglobeandmail.com

  • “…Lethbridge is a two-hour drive from Calgary and is currently the hottest real estate market in Alberta. Much of that comes down to the type of lifestyle recent buyers in this market want to live and the affordability of these properties outside that major urban centre”

Big real estate boom hits Canada’s small cities and big towns

DAINA LAWRENC, July 27, 2021

Dallas Harty, a real estate agent in Lethbridge, Alta., outside a house for sale on July 16, 2021. DAVID FULLER/THE GLOBE AND MAIL

Mat Clancy, president of the Kingston and Area Real Estate Association (KAREA), has been watching friends, family, and clients alike move back to Kingston from places like Toronto for the past couple of years and he doesn’t expect that trend to stop anytime soon.

“I mean, if you can buy a house for half the price or even a third of the cost of a home in Toronto, in a city where it takes you 15 minutes to drive anywhere and you get to have a nice big backyard and still work in the job that you were doing, why wouldn’t you want to do that?” says Mr. Clancy.

Like Kingston, many smaller cities and larger towns, also known as secondary markets, are experiencing a significant housing market boom as people want their home-buying dollars to go further, aren’t tied to a lengthy daily commute and are spending significant amounts of time at home.

According to KAREA, June home sales in Kingston were up 10.1 per cent above the five-year average and almost 19 per cent above the 10-year average. On a year-to-date basis, home sales totalled a record 2,593 units over the first six months of the year, a spike of 51.9 per cent from the same period last year.

“Throughout this pandemic, quality of life has become a bigger priority for people,” says Mr. Clancy. “And in my opinion, a house used to be a place that many people just went home to sleep at night and that was it. But when everyone got locked inside their houses, they started to question, ‘Well maybe I should buy a house somewhere I’m happy to be.’”

Even certain house amenities, which were once considered a liability in a real estate deal, are now seen as a significant bonus.

“Five years ago, when the market was considered a little more normal, a swimming pool could be considered a detriment to a house sometimes,” he explains. “Whereas now if you have a house with a pool [on the market] people go crazy over it.”

Lethbridge is currently the hottest real estate market in Alberta. DAVID FULLER/THE GLOBE AND MAIL

Indeed, this search for quality of life, which often translates into more living space both inside and outside the home, has definitely been a catalyst for the real estate market boom in many smaller communities, experts say. With commutes no longer being as much of a worry, the boundaries of where people move can expand to be hours away from an urban centre.

Lethbridge is a two-hour drive from Calgary and is currently the hottest real estate market in Alberta. Much of that comes down to the type of lifestyle recent buyers in this market want to live and the affordability of these properties outside that major urban centre.

“It’s not often that you get a city of 100,000 that has post-secondary institutions, is close to the mountains, close to the border,” says Dallas Harty, owner at RE/MAX real estate in Lethbridge. “Strategically, I think it’s a pretty nice place to be.”

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Mr. Harty says the real estate industry was aware the prices in Lethbridge wouldn’t likely stay affordable forever. “We knew we were due for a run-up, but no one knew when,” he recalls. However, with COVID-19, leading to remote working and no worry about commutes, “it was kind of a perfect storm.”

Pre-pandemic housing prices in this Southern Alberta city were “extraordinarily low,” explains Mr. Harty. It’s also a market that remains accessible to many first-time home buyers, as the average cost of home in Lethbridge sits at around $335,000, according to RE/MAX.

The same report lays out how a 49-per-cent increase in sales, coupled with 25-per-cent lower inventory, has made Lethbridge the ultimate seller’s market –– and many believe it will remain this way even in a post-pandemic world.

Similarly, places like Kelowna, B.C. are seeing a dramatic increase as the work-from-home crowd look to previous vacation and retirement areas to live because they don’t have to worry if they’re a 4.5-hour drive from the office in Vancouver.

In June, condo sales for the area were up 113 per cent compared to a year ago, townhomes were up 30 per cent, and the average home price in Kelowna was up 4.1 per cent to $1,063,914, according to the Okanagan Mainline Real Estate Board.

But while many have embraced teleworking other workers will be heading back to the office and are willing to increase their commute to get more property for their hard-earned dollars.

Gatineau, Que. has been a popular place for government workers, and other Ottawa commuters, for years. But recently, this already tight market has experienced even higher demand, explains Charles Brant, director of the market analysis department at the Quebec Professional Association of Real Estate Brokers (QPAREB).

“This is not new. This trend existed before the pandemic and the Gatineau market was among the hottest markets in Quebec,” he says. “But now Gatineau is the tightest market in the province.”

It’s not just single-family homes that are in high demand. The condo market in Gatineau has jumped 36 per cent in the second quarter of 2021 compared to the first quarter, according to QPAREB.

“There is overheating in the market and of course there are a lot of consequences [to that],” says Mr. Brant. “In particular, there’s a lot of bidding wars and over bidding … in 80 per cent of the transactions.”

He adds, “And there are no new construction projects to calm this market down.

https://www.theglobeandmail.com/real-estate/article-big-real-estate-boom-hits-canadas-small-cities-and-big-towns/

Categories: Prairie Provinces

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