Toronto’s Home-Price Gains Are Rippling Toward Niagara Fallsby
Toronto’s housing boom is fueling price gains in markets as far away as the Niagara region, better known for its waterfall and wine.
Towns including St. Catharines, more than 100 kilometers (62 miles) south of Toronto, and Barrie, about 100 kilometers north, are showing a “stronger price growth relationship” to the country’s largest city, Canada Mortgage & Housing Corp. said Tuesday. The agency used high, medium and low correlation labels in analyzing the effect of Toronto’s boom on surrounding markets.
Toronto remains Canada’s last major city to see unimpeded gains, in contrast to Vancouver which has begun to cool in reaction to various government measures. Policy makers have said the risks from a sudden price drop are the biggest danger to the financial system. Toronto prices jumped 18 percent in the third quarter from a year earlier, and the gains there are now at a record high relative to other parts of Ontario.
Home prices in the Niagara region climbed 16 percent in December from a year ago to C$317,881 ($241,221), according to the Canadian Real Estate Association.
Meanwhile, ties between Toronto and some other nearby communities have weakened since a recession in 2009. The variation may be partly explained by families insisting on a traditional detached home, the agency said.
“Low-rise home prices are driving these correlations, especially single-family home prices,” the report Tuesday from Ottawa-based CMHC said. Niagara “had not experienced” ties to Toronto prices until recently.