There’s undoubtedly a growing trend of GTA dwellers selling their home and moving outside of the city. Still, they’re sticking within the “Golden Horseshoe” area — to the east… Durham… and to the west… Hamilton and Niagara.
The reason is quite simple. Property prices in the GTA have risen over the past year, and despite cooling from their 2016/2017 peak, many homeowners who have owned and lived in their homes have seen a great increase in value. Some are sitting on equity, others have borrowed against their equity.
Most sellers are in the position where they need to sell due to various reasons: kids have left the home and they’re now empty nesters, planning for retirement in a few years, finding the upkeep and maintenance of their home time consuming and costly. And so it’s time for some homeowners to make the transition to a new home.
But to truly capitalize on their gains (whether it’s to free up some equity to enjoy for retirement, or just to pay back lines of credits), homeowners have to sell their GTA home and buy something that costs significantly less. Selling a home in the GTA and buying, say, a condo might be an option. But for those in retirement age, ongoing costs such as maintenance fees (not to mention the steep prices of condos in the GTA) have directed them to search for other options.
And this is one of the reasons why we see many homeowners sell their home in the GTA and move out to more affordable areas in Ontario. One of those areas is Niagara Falls.
Famously known for… well… the falls… and as an ultra popular tourist destination, the city of Niagara Falls (and generally the Regional Municipality of Niagara) has seen an increase in real estate sales activity and average price growth. According to the Niagara Association of Realtors, a total of 6,002 properties sold in 2019 — an increase of 7.3% over 2018. The average price in 2019 was $443,086, up 9.8% from 2018.
Let’s compare that to the figures reported by the Toronto Regional Real Estate Board. In 2019, a total of 87,825 properties sold, up 12.5% from 2018 sales. The average price was $819,319, up 3.9% from 2018.
In spite of Toronto region’s modest price increase, sales have seen a double digit growth. But let’s look at the average prices between the two areas, keeping in mind Toronto region covers some listings outside of the GTA (Toronto, York, Durham, Peel and Halton).
If you sold your GTA home worth the average price of about $819k, and bought an average home in Niagara for about $443k, assuming you didn’t have a mortgage on the home you sold, you’d be able to (1) buy the Niagara home outright and (2) have $376k cash in your bank account. (Remember, you still have to pay commission for your sale, and closing fees on the buy — so factor that in and you’d end up with closer to $300k in cash.)
Even if you had a mortgage left on your GTA home — selling it would allow you to pay off your mortgage, and either buy an average Niagara area home outright, or have a small mortgage that’s manageable in your retirement years.
Browsing some of the home listings in Niagara area will show you homes you can buy for under $500k — mostly two bedroom bungalows, but with varying styles, age and features depending on which area of Niagara you’re most interested in. In Welland, for example, you could buy a newer two bedroom bungalow, approximately 1,373 square feet, with luxury finishes for just $499k.
If you’re okay with an older home, you can get anywhere from a 2 to 4 bedroom bungalow or two storey detached in St. Catharines, Welland, Fort Erie, Thorold or Niagara Falls itself — for $399k.
As prices continue to rise in the GTA, and even in Hamilton, the Niagara real estate market will see a lot of price growth and demand. Current prices represent a huge value when compared to the average prices in the GTA and Hamilton. Buyers looking for a well priced detached home can get what they want in Niagara.
Is it time for you to start looking there as well?