Ontarians on the Move, 2021 Edition. #9— The simple explanation is that population growth caused Ontario real-estate prices to boom before the pandemic. Here’s the more complex answer.

Source: Ontario Ministry of Finance
Source: Statistics Canada Table 17–10–0009–01
Refer to: Ontarians on the Move, 2021 Edition. The Short Version
Refer to: Ontarians on the Move, 2021 Edition. The Short Version
Source: Statistics Canada Table 17–10–0061–01
Source: Statcan Table 34–10–0135–01
Source: Statcan Table 34–10–0135–01
Source: Statcan Table 34–10–0135–01
Source: CREA.
Source: Ratehub
  1. Prices should start to rise around the time, or slightly after, population growth rates rise. That is, around 2016 or so.
  2. The drive until you qualify and musical chairs effects suggest that the further away from Toronto a market is, the later price escalations should begin.
  3. Prices should consistently rise with population growth, with the increased housing starts and mortgage rates of 2017–18 taking some pressure off.
  • Home prices started rising right around the time the population started growing. Feb 2016–17 and Feb 2019–20 were banner years for real estate.
  • The home price rises appear to start in the Toronto area first then spread across the province. Our sorting of communities above is by largest prices increases during Feb 2016–17.
  • Places near Toronto saw home prices grow much faster than places not near Toronto. Until 2019, Ottawa did not see the level of home price growth that places like Woodstock, Ingersoll and Tillsonburg did.
In the eleven years prior to Jan 2016, only two communities experienced brief periods of 20% year-over-year price growth: Oakville Milton in 2010 and Bancroft in 2015.
  1. Housing prices started going up, particularly in the Toronto area, as the population started to rise.
  2. Seeing these home price rises, more families wanted to buy right away due to fear of missing out (FOMO), and investors (speculators) got in on the action, smelling potential windfall gains. This caused those prices, which had already been rising, to go stratospheric. Without those investors/speculators/FOMO types, the price rises would have been more consistent and steady.
  3. A number of regulatory changes at the federal and provincial levels caused the Toronto market to seize up, particularly for homes priced over $1,000,000. This, along with rising mortgage rates, took the wind out of the sails of the Toronto market.
  4. However, taking the boots to investors and speculators did not eliminate the supply shortage, but rather just punted it down the 401, causing prices to rise in markets like Woodstock and London.
  • Home prices in Southern Ontario started rising right around the time the population started growing in 2016, thanks to an increase in international students and visa workers. Feb 2016–17 and Feb 2019–20 were banner years for real estate.
  • The home price rises appear to start in the Toronto area first then spread across Southern Ontario. Our sorting of communities above is by largest prices increases during Feb 2016–17.
  • Places near Toronto saw home prices grow much faster than places not near Toronto. Until 2019, Ottawa did not see the level of home price growth that places like Woodstock, Ingersoll and Tillsonburg did. The home price increases were in places within 200km of the C.N. Tower.
  • There was a sharp increase in home prices in the Toronto area in 2016, which rose faster than population growth would suggest. This is likely due to investors/speculators/FOMO types noticing a tight housing market and trying to capitalize.
  • The policies put in place to stomp down price growth in Toronto worked, but only for a little bit, and caused demand to spill over to the rest of the province.
  • Home prices have gotten really stupid during the pandemic, for the same reasons stocks, Bitcoin, and old hockey cards have.

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Mike Moffatt

Mike Moffatt

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Senior Director, Smart Prosperity. Assistant Prof, Ivey Business School. Exhausted but happy Dad of 2 wonderful kids with autism. I used to do other stuff.