Outpacing Toronto real estate, Durham may be the GTA's hottest market
Buyers looking for relief in the suburbs face soaring prices, faster sales, competitive bidding
Mike Minelli was expecting a little relief from Toronto's red hot real estate market when he decided to move his growing family from a downtown condo to Durham Region.
Instead, he found himself in another competitive market where, over the past year, the average price of a home has increased 14 per cent more than it has risen in Toronto.
"It's unbelievable," Minelli said in an interview.
"In one minute, my wife and I decided to offer $40,000 more," he said of the first house they tried to purchase in Durham that attracted 13 offers.
"We lost that one."
According to a new report from Royal LePage, the strongest growth in Greater Toronto Area real estate prices over the past year is happening outside Toronto.
With a 26 per cent jump in the average house price (including condominiums), Oshawa leads the pack of GTA municipalities.
The GTA average is 13.6 per cent. In Toronto, the average price jumped 12.1 per cent, according to the report.
Durham as a whole has also seen a 26 per cent jump in the average price, according to the Durham Region Association of Realtors.
The association also reports homes are selling faster in Durham this year compared to last year, with the average time on the market decreasing from 18 days to 12.
Suburbs still more affordable
Although the prices and demand may be surging in the suburbs, homes there are still more affordable than in Toronto, where the average price of a detached house is over $1 million.
"Why are we outpacing Toronto? Affordability," Roger Bouma, president-elect of the Durham Region Association of Realtors, said in an interview.
"First-time buyers are coming east to get better value, to get a front yard and backyard rather than a balcony."
Bouma says people priced out of Toronto are attracted to Durham because of its proximity to Toronto, and improvements in transportation infrastructure, such as the Highway 407 extension and more frequent GO transit service.
"If we do an open house in Whitby, Oshawa or Clarington, half of our traffic will come from Toronto," Bouma said.
'Condo living was not going to work'
Minelli says it was his family's dream to live in downtown Toronto. But after a year there and a fourth child on the way, he decided "condo living was not going to work."
He started looking at houses in Toronto, but also decided that wasn't going to work either.
"It just wasn't affordable," Minelli said.
The family then shifted its focus to the suburbs.
"We started going further and further. Until the housing prices met our budget."
Durham Region suits Minelli because he works in the Toronto suburb of Scarborough. His wife works in downtown Toronto and will have to put up with a much longer commute.
"It's a sacrifice we had to make," he said.
But while Minelli was prepared for longer commutes and other sacrifices of suburban life, he didn't foresee how competitive buying a house there would be.
'Did we pay too much?'
After missing out on one house, despite offering $40,000 over the asking price, Minelli found another in Courtice, east of Oshawa.
The four-bedroom, two-storey home has a large backyard and other features sought by Minelli.
But on the day the buyer was accepting offers, multiple bids — five in total — came in along with Minelli's. He and his wife decided to offer much more than they originally planned.
"Our emotions took over. We got caught up in it," Minelli said.
The move paid off in the end. They got the house for $601,008. The additional $8 over $601,000 served as a good luck charm, representing the family's eight members (including two dogs).
Still, Minelli wonders if the competitive market caught him off guard.
"Sometimes I think: did we pay too much?"
At least Minelli can take comfort in how he has benefited from a hot real estate market. His downtown Toronto condo sold for $61,000 more than he paid for it just 10 months ago.