With some 6,500 people, Yarmouth, N.S., isn’t one of Canada’s most prominent locales. But thanks to a pandemic that has upended the housing market, the town at the centre of one of the world’s largest lobster-fishing regions now tops the list of the country’s hottest housing markets.
The average sales price of a home in Yarmouth has jumped a whopping 68.7 per cent in the past year, according to data from the Canadian Real Estate Association (CREA). But the town remains supremely affordable even after this jump, with an average house price of $166,466.
Watch: Century21 CEO on what homebuyers are looking for amid the pandemic. Story continues below.
Yarmouth’s price growth is five times faster than Canada as a whole, which saw its average house price jump 13.8 per cent in November, compared to a year earlier. The national average price now sits at $603,344, according to CREA.
It’s the same story in town after town, cottage country after cottage country throughout Canada. With millions of Canadians now working from home, many households are looking to escape crowded cities and set up shop in communities where social distancing is much easier.
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Which helps to explain, at least partly, why the fastest-growing house prices outside of Yarmouth are in places like Swift Current, Sask., Cornwall, Ont., and Cape Breton, N.S.
Those huge percentages may be a little deceiving. For one thing, house prices are comparatively low in these communities, so it doesn’t take much of a spike to get a large percentage increase. And in small towns, a single sale of a high-priced property can pull up the average significantly.
Still, there’s little doubt these smaller communities are outperforming the big cities these days, which themselves have seen strong price growth over the past year, thanks to record-low mortgage rates and higher household savings, with people having less to spend on in the pandemic.
In a client note Tuesday, Bank of Montreal senior economist Robert Kavcic described the new “order of merit” in Canadian real estate, from most valuable to least:
Single-detached homes in big cities
Urban big-city condos
“It remains to be seen how the ravenous acquiring of rural/vacation properties plays out later in 2021 and into 2022, assuming the vaccine is effective,” Kavcic wrote in a client note Tuesday.
“It would be reasonable to expect those markets to plateau or even give back some (but not nearly all) of the recent price gains.”
Let’s hope they don’t give up too much. After decades of Canada’s largest cities scooping up virtually all the economic growth in the country, a real estate boom in these small towns could be just what they need.