If you’ve been priced out of Toronto’s housing market, you may want to look just outside the red-hot city.
According to a recent study by the Canada Mortgage and Housing Agency, markets outside the Greater Toronto Area are seeing impressive gains as a result of Toronto’s own housing market.
Hamilton, in particular, has seen the greatest impact, according to CMHC. And markets closest to the major city centre have benefited the most.
“Our results show that house price spillovers are greatest for CMAs that are closer to the GTA,” CMHC said in the report. “In particular, a one per cent house price shock in the GTA leads to a 1.4% price change in Hamilton within one year. For example, if GTA house prices rise unexpectedly by 10 per cent in a particular quarter, then Hamilton house prices could rise by 14% in response within one year."
However, while markets closest to Toronto have benefited from price increases, the converse rule will apply in the event of decreased prices in the GTA.
“An unexpected 10% contraction in GTA prices could lead Hamilton prices to decline by 14% within one year,” CMHC said. “After three years, the total impact of a 1% house price shock in the GTA on Hamilton prices is 2%.”
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Which markets have been the most impacted by Toronto’s got housing market?