Last Updated on October 24, 2023 by Kandace Gallant
At the beginning of the year, no one really knew what would lie ahead for the real estate industry (or any industry for that matter) due to COVID-19. Even experts were stumped on what would happen to the Canadian housing market and what trends they would expect to see. Everything came to a halt; social distancing came into effect, people were being laid off or losing their jobs, immigrants could no longer cross the border, and being in lockdown lasted longer than people thought it would.
However, while the way people searched for properties changed, as well as real estate agents’ marketing techniques, various housing markets in Canada reached new heights and were provided with a strong foundation. Did some areas struggle? Absolutely. But there were no significant changes that lead to a market crash like some headlines had readers believe. This has mainly been due to the fact that mortgage interest rates are so low, plus the demand for obtaining a larger house since people are able to work remotely, some even indefinitely, so they’re able to seek out properties in neighbourhoods they never thought they’d be able to live in prior to COVID-19.
Where is the hottest real estate market in Canada?
If you thought the City of Toronto’s real estate market was on fire, you’d be right! But surprisingly, there have been other five hot real estate markets in Canada and Toronto and Vancouver are not at the top of the list.
These five regions are currently driving home price increases in Canada year-over-year as of August and September.
Ottawa – up 19.9 per cent
Ottawa’s real estate market has taken the lead in Canada as of August for seeing the highest year-over-year gain at 19.9 per cent even despite the global pandemic. This was laid out in a report by the Canadian Real Estate Association (CREA). Over the last three years, Ottawa has seen the largest price increase in Canada with the average condo price sitting at $383,000 and the average home price sitting at $592,000, making it hard for first-time buyers to get their foot in the market. Plus, with it currently being a seller’s market in Ottawa right now, this means the supply for homes is much more than there are actual homes for sale, so competition is fierce.
The buyers soaring these statistics are likely coming from larger and more expensive cities like Toronto and Vancouver who want to sell their homes and move from the hustling and bustling city since they can work from home. The most popular type of homes being snagged are single-family homes.
Niagara Region – up 15.3 per cent
The Niagara Region’s year-over-year increase of 15.3 per cent (with an average home resale price of $491,100) is also likely due to residents in the Greater Toronto Area wanting to settle for a lower-priced home and being able to get more for their money, as well as retirees flocking to the area. In August, sales of single-family homes increased by 37.2 per cent. Even with a price increase of 15.3 per cent, it still remains one of the most affordable regions to buy a home in Ontario and people have definitely taken advantage of that this year since they’re able to work remotely and because of banks’ low mortgage interest rate prices. Because of these impressive year-over-year statistics, the Niagara Region is also in a seller’s market right now with the housing demand being higher than the housing inventory.
Montreal – up 14.6 per cent
You’ve probably heard Montreal being mentioned in the news a lot recently because of their COVID-19 numbers increasing, but even despite this, the real estate market has been booming. Detached family homes saw a price increase of 21 per cent while condos saw a price increase of 16 per cent. Montreal residents have also taken advantage of the low mortgage interest rates while needing extra space as they continue to work from home and search for detached homes with a nice backyard for their family to enjoy during quarantine. The most notable sales growth neighbourhoods in Montreal, according to the Montreal Gazette, are Fabreville, Sainte-Julie/Varennes, Saint Lazare/Hudson, East of the North Shore, and Soulanges Sud. The neighbourhoods with the greatest price increases are Saint-Luc/L’Acadie, Candiac/La Prairie, Duvernay, Saint-Laurent, and Brossard/Saint-Lambert.
Guelph – up 14.3 per cent
CREA reported that the City of Guelph had seen a new record of 519 sold units in the month of September this year; an increase of 43.8 per cent since September 2019. The benchmark for a single-family home reached $667,000, $454,700 for townhouses, and $380,000 for apartments. The home price record in September of this year was $757,424. With the City of Guelph being in a seller’s market and buyers buying faster than sellers can even put their homes on the market, bidding wars have definitely become the new normal and first-time buyers are having trouble even getting into the market, particularly because they don’t have the budget to outbid other buyers going beyond their initial budget.
Greater Moncton – up 12.5 per cent
Greater Moncton is the largest city and census metropolitan area in New Brunswick, Canada and the second-largest city in the Maritime Provinces. It was surprising to a lot of Maritimers that the Greater Moncton area would see the price go up by 12.5 per cent year-over-year in August, but single-family detached homes and new-builds were in high demand during the global pandemic. According to CREA, the Greater Moncton home sales set a record in September with 429 units being sold, up 39.7 per cent since September 2019. The average benchmark price for the Greater Moncton area reached $230,500 for a detached home, $216,400 for a semi-detached home, $171,000 for townhomes, and $199,500 for apartments. Indeed, one of the best things about moving into a Maritime province is the low cost of living and, therefore, being able to get into the market early on. It’s also a great place to raise kids and become part of a small, close-knit community.
Other markets in Canada to keep an eye out for
While these hottest real estate markets in Canada are driving the housing prices year-over-year, there are still other markets to keep an eye out for amid the COVID-19 pandemic. Canadian families and young couples are moving all across the country searching for properties that better suit their budget and family’s needs, including these five high-demand areas.
Windsor
Housing prices in Windsor, Ontario rose by just over 17 per cent this year compared to last. Because of the current hot real estate market in Windsor, like Guelph, buyers are struggling with winning bidding wars due to the demand for resale properties but not enough hitting the market. In September 2020, the average home prices in Windsor-Essex were $419,711, up 29.6 per cent since September 2019 for detached houses. Again, one of the reasons for the Greater Moncton area seeing such high home prices and an influx of residents flocking to the city is because of working-from-home restrictions, retirees looking for a more affordable place to settle down, students looking for affordable housing or rental accommodations, and buyers from the Greater Toronto Area looking for more for their money.
London
London, Ontario has a very strong seller’s market right now which ended up surprising experts and buyers alike. The average price for a home in London has now reached just over the $500,000 mark with London South seeing the biggest gains in sales activity. While London South is seeing the most sales activity, London North achieved a new milestone in terms of record-setting sales prices. The average price reached $613,755, according to CREA while St. Thomas had an average price of $433,504, up 26.7 per cent from last year and an impressive 102 per cent from five years ago.
Halifax
New Brunswick isn’t the only Maritime Province seeing a real estate boom happen. Halifax, Nova Scotia, saw 5,530 houses sell between June 1 and September 30 and 960 of those properties sold for $100,000 over-asking according to data from Nova Scotia Association of REALTORS®. CREA reported that the average prices for these properties were $303,599 in September 2020, an all-time high. Another record is the housing inventory numbers which, at the end of September, were sitting at 2.7 months. Growth levels like this haven’t been seen in 15 years.
Greater Toronto Area
Despite the Toronto region not making the list of the five hottest real estate markets in Canada, the city still set records of its own. In fact, the prices of houses in the suburbs reached an all-time high. The demand for moving to the suburbs has increased since immigration came to a halt and students and workers were able to work from home. Between September 2019 and September 2020, purchases were up by 42.3 per cent as stated by the Toronto Regional Real Estate Board (TRREB). The average price of all types of houses combined in Toronto, Ontario is $960,772, including detached, semi-detached, and townhouses. There are currently only nine neighbourhoods left in Toronto where the median prices of houses are still below $1 million. The condo market in the Toronto region also saw record growth in Q3 as new listings were up by 84.6 per cent with the average resale condo price sitting at $680,963.
Greater Vancouver Area
Another record-setting real estate market can be found across the Greater Vancouver Area. House purchases in September 2020 reached 3,643, up 56.2 per cent from September 2019. The composite benchmark price for all residential property types in Metro Vancouver is currently $1,041,300.
COVID-19 has changed the real estate housing market in Canada forever
The housing market will always have its ups and downs; it’s inevitable. But no Canadian could ever have predicted the impact the novel Coronavirus would have on the housing market. People across the country have been in search of a new house or investment property in areas that they may not have ever considered before because of the prices, low mortgage rates, and being able to work from home indefinitely. Prices are still relatively low and affordable in some cities, but as Canadian families continue to expand their horizons and enter bidding wars, we may continue to see prices rise in the areas such as Ottawa, Niagara Region, Montreal, Guelph, and the Greater Moncton area.
