When the pandemic hit in 2020 there was a land rush in cities, towns and rural areas on the fringe of the Greater Toronto and Hamilton Area. Developers were anticipating a rush of new residents betting on working from home in perpetuity.
Now the housing affordability crisis continues to highlight the opportunities and necessity of residential development in these markets. Homebuyers continue to explore farther out of the GTHA in pursuit of relative affordability. And all that land snapped up during the pandemic is being readied for development – and fast.
CBRE’s Jason Child and Ian Hunt are fielding regular inquiries from GTHA-based developers looking to acquire sites in what they’ve dubbed “expansion markets.”
“Historically overlooked housing markets outside the GTHA have now become quite desirable,” says Child. “It’s incredible to look at what the last five years have done for these markets to become relevant.
“There are a lot of residential development lands that now provide the only economically feasible options, and in markets that wouldn’t have been noticed without the pandemic market shift.”
Drive to Qualify, Race for a Place
Buyers seeking ground-oriented homes are searching in expansion markets such as Simcoe County, Wellington County, Brantford, Niagara Region, and Northumberland County for a balance of amenities, proximity to employment, and affordability.
“People are having to look farther afield and these markets, many of them well-served by transit infrastructure for periodic commuters, are better positioned now than ever before,” Child says.
“The math dictates that certain housing types are not viable in core areas. The options for consumers will be to either live in an apartment in the inner core or a ground-oriented unit in one of the expansion markets.”
“Nothing can be done to make housing cheaper in the GTHA’s inner core,” he adds. “So if people want to buy family homes they’re needing to look in these expansion markets.”
The new suburban frontier has never been more attractive to GTA land buyers, according to Hunt. Case in point: he and Child recently did nine deals along the Powerline Road corridor in Brantford, Ont., selling land to five different GTA homebuilders who didn’t have a position in this market before.
“We ended up bringing a collection of GTA based developers to this new development corridor in Brantford,” says Hunt, “and it generated enormous benefits for the private landowner, whose family had farmed on that land for five generations.”
“That’s a perfect example of what our team specializes in,” he adds. “We are the conduit between private landowners and the GTHA’s residential development community, the ones actually building communities.”
Still Juice Left
Hunt and his team are not new to the game when it comes to selling suburban land. “We’ve been doing the same things for years, consistently,” he says. “But as growth continues to flow into these markets – when it’s a town of 10,000 people becoming a city of 50,000 people, developers start to pay more attention.”
These expansion markets are more attractive than they’ve been, and it has everything to do with affordability in a housing market that’s in crisis. “The margins are still very much there in expansion markets,” says Hunt. “And despite the flurry of activity in recent years we know there’s a ton of juice left in them.”
That’s good news for buyers and developers alike.
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