Price growth expected in all small markets analyzed, with average increases ranging from 3% to 20% in some areas
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Quality of life factors, or “liveability,” are drawing many Canadian homebuyers to small markets (40 percent); followed by housing affordability (37 percent)
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More than a quarter of people living in larger markets (28 percent) would like to move to a smaller market in the next two years
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A quarter of Canadians (25 percent), have received family support to purchase their first or current home; this number is consistent in large and small markets
Toronto, ON and Kelowna, BC – April 13, 2022 – A new report from RE/MAX Canada finds that “small” Canadian real estate markets are attracting new residents and homebuyers primarily for the liveability factors that they offer, such as green spaces and neighbourhood dynamism, to name a few*, ahead of affordability by a slim margin. The 2022 Small Markets Report analyzed home sales and price trends in the fastest-growing small Canadian housing markets, which are defined as those with the highest population growth rates in 2021, and having a population of less than 440,000, with secondary markets below 100,000**.
Residential prices in these communities have continued to rise as a result of low inventory and growing demand. RE/MAX Canada brokers and agents anticipate residential price growth across all small markets analyzed in the report, with expected price increases ranging from three percent up to 20 percent in some regions through the remainder of 2022. Unsurprisingly, some of these markets have already experienced significant year-over-year price appreciation in the range of 17 to 46 percent.
2022 Canadian Small Real Estate Markets Report
Activity in these communities has been fuelled in part by the financial support that many Canadians have received from family, with 25 percent of Canadians using financial support from family in order to purchase a home, according to a Leger survey commissioned by RE/MAX Canada. RE/MAX Canada brokers and agents in 83 percent of regions surveyed have also witnessed this trend locally, specifically among first-time homebuyers.
“Liveability is all about quality of life, and as we all work toward getting back to enjoying the things we love the most about our communities, it’s not surprising that it ranks so highly in importance for Canadians – especially now,” says Christopher Alexander, President, RE/MAX Canada. “Despite the fact that the national housing market still has challenges to overcome, smaller communities are viable options for Canadian homebuyers looking for the right balance between liveability and affordability. The increase anticipated for home prices for the remainder of 2022 by our network of brokers and agents is a good indicator of the appeal of these communities.”
However, the desire for liveable communities plays both ways, with 57 percent of residents in small Canadian real estate markets voicing concern that the distinct liveability qualities of their town ─ its charm ─ may be eroded as a result of rising demand from move-over buyers. Another 43 percent share the same anxiety about rising prices, feeling that they could potentially be priced out of their community if the trend persists.
According to the Leger survey, during the pandemic, 23 percent of respondents moved from a larger Canadian housing market to a smaller one, and 85 percent are happy about their move; while 52 percent of Canadians that moved to a small town believe their mental health has improved after moving.
“We’ve seen a greater influx of buyers moving to smaller markets over the past two years, a trend that’s prompted some concern among existing residents. However, the diversity of new homebuyers can be a positive thing for local communities,” says Elton Ash, Executive Vice President, RE/MAX Canada. “The recent notable growth of these smaller Canadian real estate markets makes it an opportune time for municipal and provincial governments to focus on alleviating these concerns through measures that address affordability and housing supply, but also aim to revitalize and improve community liveability that has made these regions the preferred choice of many Canadians.”
This keen interest in small Canadian real estate markets doesn’t seem to be waning, as gathering and workplace pandemic restrictions continue to ease across the country, and more Canadians return to their office settings on a full-time or hybrid basis. According to the Leger survey, the ability to work from home has motivated 14 percent of Canadians to move to a smaller community. Furthermore, 11 percent of Canadians indicated that should their employer require them to return to work in-person, they would look for another job in order to stay in their small city/town/community.
Regional deep dive into small Canadian real estate markets
RE/MAX Canada brokers and agents were asked to provide an analysis of local market activity for the first quarter in 2022, and give their outlook for the remainder of the year.
ATLANTIC CANADA
RE/MAX Canada surveyed brokers in Moncton, NB, Charlottetown, PEI, Summerside, PEI, Truro, NS and Halifax, NS and found that these regions are all sitting is seller’s territory due to low inventory and insatiable buyer demand, which is expected to continue through the remainder of 2022. Average sale price increases are expected, rising +5.5 percent in Summerside; +12 percent in Charlottetown; +15 percent in Moncton; +19 percent in Halifax; and +20 percent in Truro.
Across Atlantic Canada, out-of-province buyers are driving sales activity due to relative affordability compared to large city centres in other provinces, with buyers most interested in detached homes that offer more living space and, in some cases, water-front properties. Between January and March of 2022, year-over-year average residential sale prices have increased 38 percent in Moncton (which saw its population grow by two percent); 26 percent in Halifax (2.1 percent population growth); 22 percent in Charlottetown, and 20 percent in Summerside (two percent population growth).
RE/MAX brokers and agents in Atlantic Canada anticipate their markets to continue to be sought after by out-of-province buyers, and in some cases new immigrants, as the pandemic has shifted what people want in a home. Specifically, there is a newfound appreciation for smaller communities across Atlantic Canada.
ONTARIO
All of the small markets surveyed in Ontario are seller’s markets with low inventory and high demand. According to RE/MAX brokers and agents, average residential sale prices are expected to increase in Stratford (+eight percent); Centre Wellington (+two percent); Grand Bend (+7.5 percent); Woodstock (+eight percent); Southern Georgian Bay Area (+nine percent); Oshawa (+15 percent); Arnprior (+15 percent); and Carleton Place (+15 percent).
Throughout the pandemic, local RE/MAX brokers have reported an influx of out-of-town buyers seeking affordable housing, larger living spaces and a close-knit community feel. Many of these regions, including Oshawa, Carleton Place, and Arnprior, already have the infrastructure and public transportation in place, offering residents an easy commute to work in the city.
The cities of Oshawa (2.3 percent population growth), Arnprior (2.3 percent population growth) and Carleton Place (3.8 percent population growth) in Ontario are each anticipated to see average sale prices increase by 15 percent through the remainder of 2022, according to RE/MAX brokers and agents. Carleton Place was recently named the fastest-growing community in Canada, which is also impacting its housing market. It currently has multiple new developments in the works, which will bring in more than 1,600 new homes to the area.
WESTERN CANADA
Much like the rest of the country, Western Canada’s small markets continue to favour sellers, including Kelowna, BC (2.6 percent population growth), Chilliwack, BC (2.3 percent population growth), Cranbrook, BC, Brooks, AB, Red Deer, AB and Brandon, MB. Many of these regions are welcoming buyers from other regions and provinces (primarily Ontario), with interest in single-detached homes that offer more indoor and outdoor living space. Over the past few months, these regions have seen stronger buyer confidence and less urgency to purchase a home. This has resulted in fewer bidding wars and signals that the market is beginning to settle; however, it is too early to predict indefinitely. According to RE/MAX brokers and agents, average residential sale prices are expected to increase in +3 percent in Chilliwack, BC, +five percent in Kelowna, BC, +10 percent in Cranbrook, BC, +four percent in Red Deer, AB, +10 percent in Brooks, AB, and +four percent in Brandon, MB.
TERRITORIES
This report also analyzed the region of Whitehorse in the Yukon (2.4 percent population growth), which is currently a seller’s market that is anticipated to continue for the remainder of 2022. Average price is expected to increase +three percent. In this region, condos and townhomes are seeing the most activity, both in terms of sales and new construction. However, supply cannot keep up with the demand, and is driving prices up. Whitehorse has been a hotspot for new immigrants in particular, with municipal programs in place to help them integrate into the community. The region is also seeing out-of-province buyers who are falling in love with the lifestyle of the North.
About RE/MAX Canada’s 2022 Small Markets Report:
The 2022 RE/MAX Small Markets Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents were surveyed on activity and local developments in small Canadian real estate markets, based on local board data and activity in 2021 and 2022.
*Liveability as defined by the Leger survey respondents, was based on individual subjectiveness for what liveability meant to them. Liveability as defined by RE/MAX is the quality of life that make up your neighbourhood, such as green spaces, transportation, etc. to name a few.
**Small markets were defined as those having the highest population growth rates in 2021, according to Statistics Canada, and population under 440,000, with a secondary criterion in order to ensure a good sample of national markets of those with a population of 100,000 or less.