Out-of-Town-Buyers…Who are they and Where’d they Go??

Over the last 10-15 years the Hamilton and Niagara area has seen a huge increase in Out-of-Town-Buyers and every seller is looking for that ‘Toronto’ buyer but who are they and where’d they go?

The main types of OTB (Out-of-Town-Buyers) are Investors, Work from Home, Secondary Home Buyers and Retirees/Downsizers. Lets dive into those profiles, who they are and what that means for you if you are selling

Investors. These are buyers that are looking to expand their portfolio and generally are looking for homes that can be converted to 2 or 3 units. Could be adding a basement apartment, an unit above the garage or even an additional dwelling unit on the property. The last type of investor is the builder who is looking to buy a property, bulldoze the existing home and build 3 or 4 townhomes in its place. When Investors are looking to buy properties, they are looking to pay the absolute lowest they possibly can and as such are not the type of buyer most sellers are looking for.

Work from Home. During Covid there was a huge exodus from the GTA as employers were forced let people work from home. These people quickly realized that you got way more for your money in the Hamilton/Niagara area and that is what really drove the huge spike in prices during those Covid years. Why be stuck in a 600 sqft condo breathing recycled air and no green space vs living here with your own yard, 2x or 3x the sqft available to you and in some cases those Buyers could even save $100k+ between selling in the GTA and buying here.

Secondary Home Buyers. Some buyers are looking here for cottage type properties vs the Muskoka’s and dealing with the weekend drive up the 400 hwy. So if you have a home on the water, near golf courses or perhaps wineries, etc your home may be attractive to these types of buyers.

Retirees / Downsizers. These buyers have the money to buy your home and are looking for value for money, not just the best price like an investor. They also like our lifestyle where we are close to things to do like Wineries, Golf, hiking, great Restaurants, etc, etc. This group of buyers range from people who are retiring within the next 5 years and have some ability to work from home so the odd day they have to go to the office isn’t a horrible experience and they are looking for the lifestyle that you get when you move out of the GTA. Now, these buyers are NOT looking for 3 storey townhomes, most aren’t even looking for 2 storey family homes. They are looking for 1 floor living. So, if you have a bungalow then you are the target market for this group of buyers. However, if you have a 2 storey family home but you have a mainfloor bedroom with laundry on the main floor as well then your home can also be interesting to this group of buyers. Lets face it, while they may be retiring and downsizing they will still want the family and grandkids to come visit so they do need some room for them to stay. The main aspect is can they live on the main floor and avoid the stairs.

So now that we know who these buyers are and what they are looking for…Where’d they go?? Will they come back???...and if so….When???

Lets start with the Investors. With the dramatic increase in interest rates and the lenders becoming increasingly hard to deal with that math just doesn’t work anymore with the prices sellers are looking for. As interest rates start to drop and lenders become more aggressive to earn a buyers business we will see these Investors return, however they still are looking for the best deal….meaning lower price.

Work-from-Home have now been called back to the office and people are finding the commute just too much. Now they are selling their properties here and in Cottage country and trying to move back to the GTA. This will sort itself out over the next few years as companies figure out the right balance between how many days employees can work from home vs the office. Once that normalizes then people can determine if the commute X days a week is worth the improved lifestyle we offer.

Retirees and Downsizers. This group is still around and are still active buyers. However, one challenge they are facing is the value of their property in the GTA has gone down and the number of buyers in the GTA is down so their ability to sell their own property has been more of a challenge than a few years ago. So, if you have the type of home that allows for that 1 floor living then you in the best spot to find a buyer right now and in the future. IF you are thinking of doing any renovations keep this buyer group in mind and you can stay in your own home longer and when it comes time to sell you will be well positioned to get the highest price.

At the end of the day we are still a fantastic place to live. We are close to 2 major lakes, close to the US and Toronto, we have amazing restaurants, wineries, golf courses, biking and hiking trails and so much more. Even though we have moved into a slower buyer market interest rates will change and those Out-of-Town-Buyers will be back….its just a matter of time.

Out-of-Town-Buyers…Who are they and Where’d they Go??