The striking divide in the Toronto-area housing market: Buyers flock west

Briefing highlights

• The GTA’s  east-west divide
• A Doug Ford scene I’d love to see
• Barrick eyes bid for Newmont
• SNC cuts dividend, posts loss
• Stocks, loonie, oil at a glance
• RBC raises dividend as profit rises
• Magna raises quarterly dividend
• Saputo to buy U.K. firm for $1.7-billion
• Kraft Heinz shares tumble
• From today’s Globe and Mail

East vs. west

There’s a striking divide in the Greater Toronto Area (GTA) housing market as buyers flock to western municipalities.

Halton Region, in particular, has been drawing buyers, an analysis by Re/Max of Ontario-Atlantic Canada shows, with the central and western districts of the core also gaining “at the expense of some perennial favourites” such as East Toronto.

There’s an obvious price impact here. In Halton’s Burlington, for example, average prices surged 50 per cent, to $769,000, as home sales almost doubled between 2013 and 2018.

“As Toronto’s housing affordability eroded, the west gained market share thanks to lower prices, better transit connections to the downtown core, and more new residential construction coming on stream,” said Christopher Alexander, executive vice-president and regional director of the group.

Here’s the full picture:

Affordability is a big factor.

Prices in Toronto and other areas such as Vancouver became so out of reach, and so frothy, that provincial governments moved to cool them down, while the federal government’s bank regulator established mortgage-qualification stress tests early last year.

“Growing demand for affordable housing buoyed new construction and contributed to rising market share in Halton Region over the five-year period,” Mr. Alexander said in releasing the numbers.

“Product was coming on stream at a time when the Greater Toronto Area (GTA) reported its lowest inventory in years and skyrocketing housing values were raising red flags,” he added.

Which is one of the reasons the Hamilton market surged.

Young and old alike are playing into this, Re/Max said, as baby boomers downsized or made “lateral moves” and younger folks went for lower prices.

Over the last decade, Mr. Alexander added later, the western districts have been “the focus of significant growth and development.” Durham Region, for example, “has not been viewed in this same regard.”

Empty nesters, retirees and younger buyers have, for example, been drawn to Simcoe County, where prices range from about $529,000 to $746,000.

The regions that have seen a decline can still take heart, Re/Max said, projecting sales will rise with stronger demand in east Toronto and York, Peel and Durham regions.

“These areas still carry significant weight, despite the factors that have impacted softer performance in recent years, including affordability, lack of available housing and fewer transit options,” Re/Max said.

Even further west will also see gains, Mr. Alexander said later.

“We expect continued demand and development in communities such as Brantford, Waterdown, Kitchener-Waterloo, Cambridge and even as far as London and Niagara,” Mr. Alexander said.

“What will really impact the growth of these markets, outside of availability and affordability, will be the further investment in transit systems as people seek easy access to Toronto’s core.

“However, with the recent boom in areas to the east such as Prince Edward County, and affordability levelling out between Toronto proper and its western suburbs, we will likely see the tide begin to turn.”

Read more

• The heady days are clearly over: A 5-year forecast for house prices in 33 Canadian cities
• Carolyn Ireland: With fewer homes for sale, competition returns to Toronto’s housing market
• Canadian home prices fall for fourth month led by weakness in B.C., Alberta
• Brent Jang: In Vancouver, housing sales tumble to 10-year low
• Janet McFarland: Toronto home sales expected to rebound, but mortgage rules need review: TREB
• We knew Toronto and Vancouver were expensive. They’re actually among the most unaffordable housing markets in the world
• Housing affordability in Canada is so nasty that …
• Ian McGugan, Janet McFarland, Paul Waldie, David Ebner: Global real estate hot spots hit hard by market shift
• Gary Mason: The great global housing slump is on

A scene I’d love to see

Open this photo in gallery:

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Barrick eyes Newmont

Keep an eye on shares of Barrick Gold Corp. and Newmont Mining Corp. today as the former mulls a takeover bid for the latter.

As The Globe and Mail’s Niall McGee and Rachelle Younglai report, Barrick is considering a two-part deal under which it would snap up Newmont for about US$19-billion in stock and then sell some of its assets to Newcrest Mining.

Barrick put out a short statement this morning confirming “that the company has reviewed the opportunity to merge with Newmont Mining Corp. in an all-share nil premium transaction,” but hasn’t yet made a decision.