With each passing month of the pandemic, it's becoming more evident that Canadians have become housing-crazed. Although some experts predicted housing crashes, historically low interest rates, increased household savings, and the growing trend of remote working have led to record-breaking real estate activity and rising housing prices instead.
In light of this, housing experts have called on the Bank of Canada to intervene and introduce measures to cool Canada's red-hot housing market -- similar to those implemented during 2016-2017 -- though, little has been done to right the course of the frenetic market.
However, unlike past housing booms, the surge of activity isn't just occurring in dense urban cores like Toronto and Vancouver. Instead, it's also happening in smaller suburban towns as buyers from major cities branch out in search of more space -- carrying with them the expectation that they'll not be priced out of smaller cities. This is not what they're finding in Barrie, a hot move-over market.
Located 45-minutes north of the Greater Toronto Area, Barrie is historically home to properties at half the price than what you’d find in the GTA -- where the average home price is currently $1,090,992.
READ: CMHC Forecasting National Home Prices Could Now Rise 14% in 2021
Though, with demand grossly outweighing supply as buyers continue to snatch up what listings are available, Barrie's housing market now rivals Toronto levels, with homes that were once $600K now hitting the market for over $1M.
Now, the city is proving to be one of Canada's rising housing markets and an investor hotspot, especially as more than half of the buying activity in Barrie is coming from people leaving the GTA in search of more space in close proximity to the city.
Engel & Völkers license partner Jeremy Brooks told STOREYS that 70% of his showings are from clients coming from the Toronto area, compared to 30% in a normal market.
"To see it that high is really interesting and indicative of people wanting to move. Looking forward, if things do go back to 'normal,' maybe things will change, but for now, people are looking at all Barrie has to offer," said Brooks.
While Barrie's housing market is undoubtedly hotter than ever right now, Brooks said it was quite steady in 2020 -- even amid the pandemic.
"But what's more surprising is that the market got even stronger in Q1 this year. Maybe it was just an oddity, and it would return to a balanced market and calm down. But, instead, it took off like a rocket during the start of the new year. It was quite surprising to see, and all we could do is hold on," said Brooks.
On a year-to-date basis, Barrie home sales totalled a record 2,500 units over the first four months of the year -- a substantial gain of 91.3% from the same period in 2020, according to the Canadian Real Estate Association.
"We are experiencing a spring market like no other in our region’s history. MLS home sales shattered the previous April record by a wide margin and posted the second-highest monthly total ever, eclipsed only by the all-time record set just the month before," said Chantal Godard, President of the Barrie & District Association of Realtors.
"New listings outnumbered sales for the fourth month in a row, helping to backstop overall inventory. Although active listings haven't been this low in the month of April in more than 25 years, overall inventory appears to have bottomed out and has already doubled from the recent historic low in January 2021," added Godard.
However, the continued robust demand for homes has once again pushed benchmark prices to a new all-time high, which are now well past the $700,000 mark.
While pent-up demand and low-interest rates are certainly contributing factors to the success of Barrie's housing market, Brooks says in Barrie's resale market, there hasn't been a lot of new developments going on like in other areas.
"The driver here is supply. With a lot of people coming to Barrie, there is way more demand than normal. Because of this, there is a lot of pressure on the limited supply that we have because we don't have a lot of new construction to choose from," explained Brooks.
"Now, our middle-market, subdivision, Barrie-style housing is seeing a lot of growth. However, given that this market is the most easily influenced by interest rates, and with them currently low and under the notion that they could go back up is really driving this market," said Brooks.
And, with the changes to the mortgage stress test looming, Brooks says this is only adding to people rushing to get offers in.
From a rental perspective, Barrie's rental market is one of Canada's hottest, as it offers investors major ROI with rents comparable to Toronto's and major consumer demand.
"Rental rates are always pretty strong in Barrie, and recently we had the third-highest rental rate in all of Ontario. Though, to see rental rates increase like this has been pretty dramatic," said Brooks.
Barrie's average rent for a 1-bedroom apartment is currently $1,790 -- a 21% year-over-year increase.
"With how rental rates are rising, it's pulling in more investors from outside of town to the market, and now investment prices are going up as well," added Brooks.
Whether you're exploring housing options outside of the GTA or you're looking for an investment property, Barrie continues to serve as an attractive housing market and one that more people need to know of.
"Barrie as a city has so much to offer, and in a regular state of the world, it hovers under the radar for too many people who should know about it," said Brooks.
"I think it's exciting that so many people are looking at it as a place to call home," said Brooks. "I think regardless of what happens in the coming months, Barrie will continue to be a great place to live."
