[URBAN NOTE] "Spillover from Toronto’s hot housing market is now driving up prices as far away as Ni

[rfmcdonald]

The Financial Post's Garry Marr describes how the Toronto real estate boom is driving up prices elsewhere in the Greater Toronto and Hamilton Area and beyond, as far as Niagara.

Canada’s largest city just keeps getting bigger — at least in terms of what constitutes “Toronto” real estate.

Canada Mortgage and Housing Corp. said Tuesday it is seeing a so-called spillover effect as far away as the St. Catharines-Niagara region after already witnessing the impact in places like Guelph, Hamilton and Barrie.

“Our evidence indicates that increasing single-family home prices in the GTA are motivating buyers to purchase more affordable homes in nearby centres. In turn, this purchasing behaviour is driving up house prices in these markets,” said Jean Sébastien Michel, principal, market analysis with CMHC.

The Canadian Real Estate Association said in January the average price of a home sold in Niagara reached $317,861, up 16.1 per cent from a year ago.

The Crown corporation maintains the impact on price has been greatest in Hamilton, where it says there is strong evidence of overvaluation. “The growth in house prices persistently outpaced economic and demographic fundamentals,” according to the report.