It might be surprising to learn that more than half of the Canada’s population calls British Columbia and Ontario “home.” Within these two provinces, millions of people live in the ultra-dense municipalities of Toronto and Vancouver. As everyone knows, these have been some of the hottest housing markets in the country, and in the global real estate sector at large. But these aren’t the only red-hot jurisdictions with enormous sales activity and price growth in the Canadian real estate market. Cottage country has experienced a significant lift over the past year. Here, we take a closer look at the latest Bancroft real estate data and market trends.
The coronavirus pandemic has altered the country’s housing sector in a myriad of ways. Working professionals are searching for more space to accommodate home offices, personal gyms and entertainment centres. Many urban families are leaving major urban centres to buy detached or semi-detached homes outside of the city. And, in one of the most compelling real estate news developments over the last 12 months, small towns and rural communities are experiencing monumental growth.
It is the suburbs and rural areas of the country that are seeing record sales activity and housing valuations, particularly over the past year. Thanks to ultra-low interest rates and provincial migration, demand for housing in these regions is through the roof. The problem? Many of these small-town markets are struggling to keep up with the demand, amid extremely limited supply. Furthermore, families that migrate from the big cities have the purchasing power to easily outbid first-time homebuyers in these smaller municipalities, driving prices up.
Is Bancroft, a town located three hours northeast of Toronto, experiencing the same scenario?
Bancroft Real Estate Trends Prove That Small Town Markets Are on Fire
Is Bancroft maintaining the stellar small-town performance in the broader housing market?
According to the Canadian Real Estate Association (CREA), residential sales across Bancroft skyrocketed 168.2 per cent year-over-year in March, recording a new sales record for the month. In the first three months of 2021, home sales have surged 88.9 per cent from the same time a year ago.
For a small town like Bancroft, the surge in real estate prices has been impressive. In March, the average price of homes sold increased at an annualized rate of 86.6 per cent to $576,177. Moreover, the dollar value of all residential properties sold spiked 400.5 per cent in March from the same time a year ago, to $34 million.
How are inventory levels in the heart of North Hastings on the Canadian Shield? While the number of new residential listings rose 67.4 per cent to 77, active listings plunged 53.8 per cent year-over-year to 44. The number of active listings is the lowest it has been in the month of March in more than 30 years.
The months of inventory – the number of months it would take to sell present stocks at the current rate of sales activity – clocked in at 0.7 at the end of March. This is down from 4.1 months last year and below the long-run average of 6.6 months for this time of the year.
The Small-Town Comeback Continues
The Ontario Real Estate Association (OREA) recently published a white paper that projects that the influx of homeowners will continue to descend upon rural Ontario, and that small towns are making a comeback.
OREA CEO Tim Hudak writes that there are several factors at play that could prompt this trend to persist. These include more affordable housing compared to pricey urban centres, far more space, the freedom to work from home, and access to natural gas. At the same time, Hudak says, a lot needs to be done to facilitate this transition, such as more investment in broadband and government support mechanisms to help families make a down payment on their first home.
“It is not surprising that the GTHA (Greater Toronto and Hamilton Area) is faced with different pressures than the rest of Ontario. However, the pressures facing non-GTHA areas rarely receive attention from politicians and media alike, given that the price or demand increases in these parts of the province never seem as significant as they do in urban Ontario,” the white paper states.
Overall, according to the report, rural communities need a chance to bounce back after years of neglect, whether it is more money for rural infrastructure development or provincial dollars for schools and hospitals.
But now that soaring home prices have become a “small-town issue,” says Robert Hogue, a senior economist at Royal Bank of Canada, could Queen’s Park respond to the pressing needs of rural communities? Could Ottawa do more for small towns nationwide? If housing affordability continues to erode, policymakers might have no other choice than to take action.
“It puts a lot of pressure on affordability locally and that I think it is going to be quite a challenge going forward,” Hogue told CTV News. “This is no longer just a big city kind of Toronto, Vancouver story, this is a small-town issue now.”