By Lindsay Smith/Columnist
Waldo has left Toronto…. where in Canada did he end up? Between July 2019 and July 2020 over 50,000 people left Toronto – enough people to make up a small town. Where did they move to and what caused them to pack up and move out of a town so many have dreamed of living in? Let’s dig in and see what is causing the migration.
Is it because the rental rates in Toronto are increasing? Nope! A report from November 2020 shows that earlier in the year the forecast for rental rates were expected to increase nine per cent, however, we had a dramatic turnaround. The average rent in Toronto dropped by 20 per cent as of November/20. Tenants are part of the 50,000 group that have left Dodge. What this has done is increased pressure on the demand for homes for sale, along with a shrinking stock of available rentals in Oshawa.
With rentals, we are seeing bidding contests on available rental units. In the past 30 days, just under 20 per cent of all rentals have rented for more than asking. (MLS rentals) Oshawa is tied for eighth, for the highest rental prices in all of Canada. With supply and demand controlling both real estate and rental pricing, what we are seeing with the migration from Toronto is large volumes of families landing here in town. Over the past 90 days, the average rental in Oshawa rented for $2,125 per month. The same period a year ago shows the average rent was $1,875 or an increase of about 12 per cent.
A recent article in Huffington Post was penned looking at the top five towns that people move to when they decide to leave Toronto and, not surprisingly, Oshawa is on the list.
In this report, Oshawa is seen as being the closest “commutable” city to downtown Toronto, having direct GO train access. A worker can be in Union station in under and hour from the train station in Oshawa. Not only proximity, Oshawa has the lowest price point in the areas surrounding Toronto. This is one of the major reasons Oshawa has become a destination. Price, proximity, and a small-town feel is a huge attraction to a new cohort of employees who can work out of their homes and, when necessary, return to their Toronto offices in an efficient way.
2021 is starting to unravel in the most incredible manner. Much of that is the pressures being placed on the rental and resale market caused by people moving from the west end. In the past week, 91 per cent of all sales in Oshawa sold for more than asking. (A more shocking number was in Whitby where every home sold for over asking price) This unusual level of activity is causing the price spiking we are seeing happen in the market. A good example are semi-detached homes. At 2020 year-end, they were selling for $595,000, and as of today the average for January is $647,000. 2021 will be a fascinating year to watch where the market moves in both values and activity.
The mystery question is, where the heck are people moving to when they decide to sell? As the activity jumps up, and with the overheated market we find ourselves in, a new way of buying has appeared; people are forced to buy first and sell once they have secured a property. This is a localized issue, changing when a buyer begins to look for homes in areas out of Durham Region and the activity slows to a more balanced market. Very few people I have met are comfortable buying this way, however it seems to be the only method of purchasing a home in Oshawa. We have had more people sell and move out of Durham Region over the past few years than I have ever seen. Like the migration from Toronto, some Durham Region residents are determining that they can move out of the area, find a property that they can work out of that is much cheaper than living in Durham. We have had clients move to Belleville, Trenton, Grafton, Peterborough, Lindsay, Madoc, and as far away as Halifax and New Brunswick.
The migration east may start in Toronto, but it seems a “chain reaction” is happening with the move ending up in eastern Ontario or into the Maritime provinces.
As I mentioned earlier, 2021 is a year like no other, a pandemic and a real estate migration like I have never seen before. Time to tighten the straps on our masks.
If you have questions about the above information, or you can see a real estate emergency on the horizon, I can be reached at firstname.lastname@example.org.