With annual population growth reaching three per cent in Toronto and Vancouver, three times the national average, governments in Canada’s two largest cities are investing heavily in transit, opening up traditionally undervalued urban and suburban areas.
A recent report by ReMax looks at emerging neighbourhoods across the Greater Toronto and Vancouver areas, highlighting the compromises homebuyers are making to live there and the impact of new development on the area.
Kingsley Ma, area vice president at ReMax, said new and emerging neighbourhoods have always been a way for consumers to buy into “hot pockets” or developing markets that are often more affordable.
“Any time that the government is looking to build infrastructure in a newer-ish area, those areas tend to have more potential in terms of developments because it’s easier to commute elsewhere for people who choose not to own cars,” he told Real Estate Magazine.
Sustaining a bigger population
Ben Tal, deputy chief economist at CIBC, said governments at all levels are under-projecting the population increases, which may have consequences.
“Population growth normally tracks at one per cent annually, but Canada has consistently seen upwards of 3.6-per-cent growth year-over-year,” he said in the report.
“The Canadian government has realized they can have too much of a good thing, and need to have sustainable, measured growth.”
However, most Canadians see local population growth as a positive characteristic in their communities, with young Canadians (18 to 34) most likely to agree.
Tal is urging Ottawa to consider alternative housing models like factory-made construction to help drastically increase housing starts to address the ongoing supply issue.
“Expanding transit and other infrastructure is also just as important, as it adds affordability and connectivity to traditionally less-accessible communities,” he said.
Greater Vancouver Area
Ma said it’s usually larger developers with a team of researchers and government liaisons that spearhead such infrastructure projects.
That’s the case in Fraser Mills, Coquitlam, where developer Beedie is poised to build as many as 5,500 homes–a mix of high-rise condos and townhomes–on the Fraser River. Despite ongoing construction, it has strong long-term investment potential with home prices ranging from $732,000 to $1.8 million.
Homes in Ladner, South Delta, near the Surrey/Richmond border, can cost nearly $1 million less than the average in the Greater Vancouver Area. But it comes with a trade-off. The replacement of the George Massey Tunnel into an eight-lane tube tunnel with dedicated transit and active transportation lanes means residents will have to contend with traffic and infrastructure delays.
Airport proximity keeps prices more affordable in Bridgeport
Established communities like Bridgeport in Richmond consist mostly of older homes, averaging 30 years old. The area has strong transit connections and homes up around $1.07 million, about $300,000 lower than nearby Stevenson.
“Bridgeport has always been undervalued for a reason, because it’s on the airplane landing path,” Ma said of its proximity to the Vancouver International Airport.
As a result, homes are mandated to have air conditioning built in, he said.
“It’s a city requirement because you can’t really open windows and listen to airplanes all day.”
Is SkyTrain station enough of a draw?
Meanwhile, development along transit-oriented areas with access to the long-awaited Capstan Station, the newest addition on TransLink’s SkyTrain network, is also prompting development.
Those types of infill projects primarily consist of high-rise condos, but ReMax Westcoast Realtor Adam Watchel said he’s not sure it’s swaying people to purchase in those areas.
“I don’t know if it’s actually housing that people want, and that is my genuine concern,” he said of expensive condo fees on top of mortgage and insurance payments.
Other areas highlighted in the ReMax report include Mount Pleasant East, Willoughy Heights in Langley and Coquitlam West.
Transit makes Scarborough more accessible
In the GTA, Scarborough remains one of the more undervalued areas, due to misconceptions and outdated biases, reads the report.
Cameron Forbes, Realtor at ReMax Realtron Realty Inc., said rapid development in the areas is improving affordability in the community.
“Expansions like the Eglinton Crosstown and Ontario Line, which cut through the city, mark investment opportunities for savvy buyers,” Forbes said in the report.
Clairlea-Birchmount in Toronto is traction with young professionals and families due to its blend of urban and suburban living, transit access, and diverse neighbourhoods. The average house price is $932,014.
There’s also Wexford-Maryvale, a family-friendly suburb minutes from downtown Toronto with mostly brick bungalows and one to two-storey homes that fetch an average price of $1.07 million.
Looking west, Hamilton is seeing buyers from Toronto moving out of the city in search of affordability, more space and a sense of community.
Conrad Zurini, broker and owner of ReMax Escarpment and Niagara, notes in the report that many residents appreciate smaller businesses, the growing cultural and arts scene and the opportunity to shop locally in lieu of big box retailers.
Areas like Crown Point in Hamilton, a diverse residential neighbourhood with affordable detached homes, has an average home price of $570,000.
Downtown Markham, anchored by a new York University campus, also shows potential with condo developments, restaurants and cultural attractions. Home prices have a wide range–from $660,000 to $1.6 million.
Other emerging neighbourhoods in the GTA include Aldershot South in Burlington, Seaton in Pickering and Don Mills–Victoria Village in Toronto.
Samantha Long is a contributing writer for REM. Based in Atlantic Canada, she has over a decade of experience covering business and politics across digital, print and broadcast media.