Canadians are fleeing expensive cities and heading to distant small towns. RBC economist Carrie Freestone looked at population growth in their latest research note. The bank found “resort towns” are seeing the fastest growth in the country. In general, distant suburbs of major cities are growing the fastest. This can create a long-term boom for those economies, but also erode affordability. Yes, even distant suburbs are quickly becoming unaffordable for locals.
Canada’s Fastest-Growing Populations Are Resort Towns
Canada’s fastest population growth is seen in small “resort towns,” shows Census data. From 2016 to 2021, the top three growth markets are Squamish (21.8%), Wasaga Beach (20.3%), and Tillsonburg (17.3%). Small numbers are easier to grow, so the high rates aren’t completely surprising. It’s still a mind-blowing amount if you think about it. Close to 1 in 5 people in these three cities didn’t live in those regions just 5 years prior.
RBC specifically made mention of two markets — Brantford and Kingston. In Brantford, the average home price is up 166% from 2016 to 2021, according to the bank. Kingston home prices also spiked, more than doubling over the same period. This is rapid growth for any region, never mind small towns.
People Fleeing The City Are Displacing Locals But Bringing Money
RBC attributes this trend to people moving to the suburbs from the city. As the gap between suburban and city prices close, those with modest incomes are pushed further out. “Canadians venturing away from urban centers in search of more affordable housing and greater space are also landing in more distant suburbs,” wrote Freestone.
Rapid population growth contributes to higher home prices, which can create issues. The bank says this can be a boost to local economies, as new buyers bring their incomes to the region. Big city residents along with incomes to match, but located in the burbs can mean a lot more spending.
“While rapid population growth may contribute to the erosion of housing affordability for locals, new arrivals bring with them an abundance of spending power to inject into the local economy, boosting provincial tax revenue and supporting businesses,” they said.
Canadian real estate prices are growing so fast they’re pushing people further away from cities. Not just to the suburbs, which have been an on and off trend for decades. They’re getting pushed to distant suburbs, often considered cottage country. This says a lot about Canada right now — even far off lands are becoming too pricey for most buyers.