CMHC: GTA Housing Prices Spilling Into Nearby Markets


* Note: Seasonally-adjusted prices. Last data point is 2016Q3.
Source: CMHC, based on CREA

HAMILTON — According to CMHC, historically, prospective home buyers who have found themselves priced out of the Greater Toronto Area (GTA) have migrated to Hamilton, Barrie and Guelph to buy single-family homes. Recent data is now showing that home buyers have been moving even further out, especially to the St. Catharines-Niagara region.
“As the price of low-rise houses in the Toronto area has soared, house prices in nearby communities such as Hamilton, Barrie and Guelph have also been driven up,” said Jean-Sébastien Michel, principal of the market analysis centre at CMHC.

To further illustrate the spillover effect, the report also considers the potential impact that a positive and negative shock to GTA home prices may have on surrounding areas. While these scenarios are in no way predictions, they demonstrate that should GTA house prices rise unexpectedly by 10% in a given quarter, Hamilton house prices could rise by 14% within a year. Conversely, an unexpected 10% contraction in GTA prices could lead Hamilton prices to decline by 14% within a year. In both cases, the impact would moderate over time and be less pronounced in other nearby communities.