When it comes to real estate, it’s no secret that location is one of the most important factors. So, it’s no surprise that some areas are more popular than others. In the Canadian housing market these days, there is no shortage of hot markets, though some Canadian housing markets are still hotter than others.
The two hottest markets in Canada have been cited for a long time as the major cities of Toronto and Vancouver, but there are many other areas that may be more attractive for the wise investor.
Ontario one of the largest segments of the Canadian housing market
Ontario, particularly the south, is the most densely populated region in the country and one of the most popular for real estate. And while Toronto and the GTA are responsible for a lot of that, they are far from the only markets in the region. Many markets in Ontario have experienced unprecedented price growth in the last two years.
Stats from the Canadian Real Estate Association put the average price across all property types in Ontario at $912,763, almost 23% above the same time last year. In this article, we are going to take a look at the hot markets in Ontario where you may want to consider investing.
What makes the real estate market hot?
When people in real estate talk about a hot market, they are not talking about the weather. Rather, ‘hot’ in real estate terms is more synonymous with ‘popular’ or ‘busy’. There are a few interconnected factors that in combination would indicate a hot market.
For one, a hot market is very popular and as a result, has a lot of demand. Due to high demand, a hot market will also commonly have a narrow sales-to-new-listings ratio and tight sellers’ market conditions. These factors result in putting upward pressure on sales prices. Side effects of a hot market can be multiple offers on properties, properties spending fewer days on the market, homes selling above market value, and more.
The question of why some real estate is more popular has no single answer. People looking to live in an area base their decisions on things like available jobs, amenities for families, transportation options, as well as social factors like proximity to family.
Real estate investors will be attracted to wherever people want to live, but also look at economic and political indicators to determine how an area might be favourable for investment. Smart real estate investors will try to buy in an area before it has reached peak popularity for the best returns, as once an area is targeted by real estate investors, it can quickly heat up.
A list of the hottest real estate markets in Ontario
Nearly every major market in Ontario is located in the densely populated southern region and are primarily urban areas. Though there are many hot areas in real estate right now, here are some of the most popular.
Toronto and the GTA
Is anyone surprised? As Canada’s biggest and busiest city, there is essentially always demand for property in the city of Toronto. Being bordered by other cities in the GTA, Toronto essentially has no room to expand, meaning housing supply can easily become a rare commodity.
Though Toronto tends to be a safe bet for real estate, it also has very high prices, making it harder to get into the market.
The GTA has a lot of development like Toronto and residents can easily access Toronto for jobs and activities. However, an added benefit in these cities is more space, more housing variety, and often better selling prices.
It’s also not correct to say these cities are entirely reliant on Toronto, as they have strong economies of their own and many appealing features for residents. The hottest markets in the GTA include Brampton, Mississauga, and Markham.
The average price of homes in the GTA cost $1,163,323 in November of 2021, up over 20% this year. While detached homes still make up the most sales, areas like Toronto and Mississauga both have a relatively busy condo market, which is appealing to those looking to get into the market at a more affordable price.
London
London offers a lot of things that make its housing market appealing to prospective buyers. The city is well developed, with lots of options for homes, lots of things to do, schools of all levels, and a strong local economy.
And despite these benefits, it has remained largely affordable and offers good investment growth for the future. Though many cities have seen a lot of demand from people moving away from Toronto, London is far enough away to avoid a lot of this influence.
However, Londoners can conveniently travel to the GTA via the direct 401 or by GO train service. A proposed high-speed rail line to Toronto would make this city even more appealing in the coming years by better connecting it to the areas like Kitchener-Waterloo and Toronto.
The London housing market saw an average home price of $673,995 in November 2021, up 24% from last year. Detached homes make up the largest segment of the market by far, though there are still options to be had in the semi-detached homes, townhouse and apartment segments, which are most popular with younger home buyers.
Ottawa
Ontario’s other major city has maintained a much more affordable housing market, while also offering all of the amenities one would expect from a city of its size. Average prices in Ottawa for residential property were about $716,000 in November 2021. The city has a strong demand, a developed economy, and many housing options both in the core and its surrounding suburbs. The city is more affordable for now, but there are great opportunities for appreciation and cash flow, meaning investments made here could pay off greatly.
Kitchener-Waterloo
This pair of cities is known most for the multiple post-secondary schools in the area, and their growing economy, especially in the tech sector. Though technically two separate cities, they have grown to meet one another, and therefore are commonly seen as one market. The area is popular for families, as well as post-secondary students, young professionals, and new immigrants.
The average residential price in the region was $841,764 in October of 2021, a substantial increase of over 30% from the previous year. In addition, available inventory in the area has been very low for years, driving competition in the market. Despite this, the cities continue to be one of the fastest-growing cities in Ontario, indicating still much to come.
Windsor
Windsor is located just over the border from the much larger U.S. city of Detroit. The city has long been known for its ties to the automotive industries, something it shares with its U.S. neighbour. However, in recent years the economy has diversified greatly. While in the past the city has not been a very popular spot, it has been increasing in desirability for a while now.
The city’s growing economy, its proximity to the U.S. border and the many job and education opportunities are making it stand out to families and real estate investors looking to buy homes. The current average sale price in Windsor is just $ 570,879, making it much more affordable than other cities of comparable size in southern Ontario. This price represents an impressive 36% growth over last year, indicating the massive potential the city holds in real estate.
Hamilton
Like Windsor, the city of Hamilton has been, in recent years, disproving what many saw as a poor reputation. Its attractive location, recent economic growth, and many housing options have seen the city’s popularity grow greatly. The current average home price in Hamilton is $922,297, making it one of the less affordable options, however, the prospects for growth are still good.
Should I buy in a cooler market?
The cooler markets in Ontario are often seen as such for the opposite reasons as the hot markets. For example, the areas in the province with the lowest average home prices tend to be the more remote communities, with less diversified economies and less attractive amenities.
However, with the current state of the market, you will be able to find desirable real estate investments almost anywhere in the province, and may just avoid high competition by ignoring the hot areas. Ultimately, markets can be very unpredictable, and you should base any investment on the merits of the investment itself, rather than on questionable market predictions.
Corben joined CREW as a relative newcomer to the field of real estate and has since immersed himself and learned from the experts about everything there is to know on the topic. As a writer with CREW, Corben produces informative guides that answer the questions you need to know and reports on real estate and investment news developments across Canada. Corben lives in Guelph, Ontario with his partner and their two cats. Outside of work, he loves to cook, play music, and work on all kinds of creative projects. You can contact Corben at corben@crewmedia.ca or find him on Linkedin at https://www.linkedin.com/in/corbengrant/.
