A Pandemic Bonus
David Simmonds

It’s official. House prices in the County have been escalating. The rate of escalation is faster than in Metro Toronto, Ottawa, Peterborough, Niagara on the Lake and the Muskokas.

On average, home owners gained $250,000 in value 2020-to-2021.

According to PEC Affordable Housing Corporation president Chuck Dowdall, the average sale price in March was $821,000. That’s an increase, year over year, of nearly $250,000, which is not a bad return for just sitting on your duff during the pandemic watching prices go through the roof. Moreover, that’s not counting in the gains pre-2020; there’s a bonus for County homeowners in there somewhere. 

If you own a house, you are no doubt considering how to spend your bonus. That first requires you to access it. In turn, you must either mortgage it, rent it or sell it.

Mortgaging allows you to stay put, but it requires paying interest to the mortgage lender. Renting out your place involves leaving your residence as a tough-to-manage capital investment, in which your only access to spending money would be the difference in rents between your new place and your existing house, The simplest thing to do, if you want to access your bonus, is to sell. 

Selling, however is a two-stage process. Unless you like sleeping under the stars in a Canadian Tire parking lot, you’ve got to find yourself somewhere else to live. If you’re planning to rent, you can live comfortably for more than twenty years paying, $3,000 a month from your $821,000 cash pile. Many people want to buy again, whether for tax reasons, the principal residence capital gains exemption, or family reasons, the pride of home ownership.

There is the bugaboo. House prices have also risen elsewhere in Ontario; not as much as in the County, granted, but still enough to eat up much of the bonus. The only way you can quantify your bonus is to take into the equation the magnitude of the savings you will realize by buying into a much cheaper market. Where do we find these much cheaper markets?

Fortunately, a real estate company by the name of Zolo has conducted a survey of the cheapest places to live in Ontario, using April 2021 data. It has factored in home prices as well as unemployment rates and local family incomes and produce winners in three categories: large cities of more than 100,000 population; medium size cities with a population of between 30,000 and 100,000 and small cities with populations under 30,000.

Windsor wins, for once.

The winning big city is Windsor, with an average house price of $534,000. This leaves you with a bonus of $287,000 on the sale of you average County house. Zolo says, “Windsor is home to The University of Windsor, ranked as one of the best universities in the nation.

Windsor has a population 287,000. It’s a family-friendly and affordable place that offers plenty of festivals, museums and gardens and don't forget about the gorgeous waterfront view.” They even have some wineries there in case you feel homesick that aren’t overrun with tourists and STA rentals. 

At the top of the medium size cities stands Sarnia. With a population of 96,0000 and an average sale price of $358,000, leaving you with a net bonus of $463,000. You could in fact buy two houses in Sarnia and still have some money left over in your bonus. Sarnia is a very refined place to live. 

Rounding out the all-star list is Deep River, with population of 3,658: it’s where all the unclear scientists that work at the nearby Chalk River nuclear facility live. The average house price is $217,000, so you could buy three houses with your bonus and still have some money left over. Zolo agrees: “You'd certainly have lots of extra cash to participate in all of the cross-country skiing and snowmobiling the region is known for.”

There are three attractive options and that’s just picking the top from three lists of ten. Which is it to be? I plump for Deep River. It’s the closest to the County, a pleasant three-and-a-half-hour drive away on Highways 41 and 17.

It would take at least an hour longer to get to Windsor and Sarnia. Plus, you’d have to cross through Toronto traffic to get there. Deep River has a symphony orchestra, a municipal swimming pool and a nearby forest research centre. It’s just a tad bigger than Wellington, Ontario, and sits on the Ottawa River facing the Laurentian mountains.

So how about it? Is anyone up for a mass exodus from the County to Deep River? Who’ll trade first?

One problem with the rush to less expensive housing.

There is one small problem with my proposal, A mass exodus would see us all selling at the same time, thereby flooding the market and driving prices down, while we would all be purchasing in Deep River at the same time, thereby driving prices up. Our bonus would be squeezed at both ends. Thus, insist that you go first, while I bravely try to hang on here, not quantifying my bonus.