Canadians are fleeing expensive cities and heading to remote small towns. RBC Economist Carrie Freestone looked at population growth in her latest research note. The bank found that “beach towns” are the fastest growing in the country. In general, the outer suburbs of major cities are growing the fastest. This can create a long-term boom for these economies, but also erode affordability. Yes, even remote suburbs are quickly becoming unaffordable for locals.
Fastest growing Canadian cities are resort towns
The fastest population growth in Canada is seen in small “resort towns,” according to census data. From 2016 to 2021, the top three growing markets are Squamish (21.8%), Wasaga Beach (20.3%) and Tillsonburg (17.3%). Small numbers are easier to grow, so high rates aren’t completely surprising. That’s still a mind-boggling amount if you think about it. Nearly 1 in 5 people in these three cities did not live in these areas just 5 years ago.
RBC specifically mentioned two markets — Brantford and Kingston. In Brantford, the average home price has increased by 166% from 2016 to 2021, according to the bank. House prices in Kingston have also soared, having more than doubled over the same period. This is rapid growth for any region, let alone small towns.
People fleeing the city displace locals but bring in money
RBC attributes this trend to people moving out of town to the suburbs. As the gap between suburban and city prices narrows, low-income people are pushed further away. “Canadians who venture away from urban centers in search of more affordable housing and more space are also landing in more remote suburbs,” Freestone wrote.
Rapid population growth is contributing to rising house prices, which can create problems. The bank says this can boost local economies as new buyers bring their income to the area. Residents of large cities with corresponding incomes, but located in the suburbs can mean much more expense.
“While rapid population growth may contribute to the erosion of housing affordability for residents, newcomers bring with them an abundance of purchasing power to inject into the local economy, increasing provincial tax revenues and supporting businesses,” they said.
Real estate prices in Canada are rising so rapidly that they are driving people away from cities. Not just in the suburbs, which have been an intermittent trend for decades. They are pushed to remote suburbs, often considered cottages. That says a lot about Canada right now – even faraway lands are getting too expensive for most buyers.