The secondary markets of the real estate sector have been skyrocketing in Ontario in recent years. In vibrant multicultural cosmopolitan cities like Toronto and Ottawa, the growth of the construction market has been rapidly increasing, from urban expansion to secondary markets. By 2026, Ontario will already be experiencing spillover beneficiaries in the secondary markets as drivers of a robust real estate rebound and hyper-development. But the million-dollar question is, why?
Reasons Why Secondary Markets in Ontario Are Leading the Construction Rebound:
Affordability and Relative Cost Advantage
Affordability is a key reason why secondary markets in Ontario are leading the construction rebound. The premium property prices and acquisition costs in cities like Toronto and Ottawa are very high, which is why demand for the secondary markets is rising rapidly, because the acquisition costs in the secondary markets are significantly lower. The developers take advantage of this opportunity to build residential and commercial projects with good profit margins. They also set competitive prices for property buyers and renters, both. The risk of secondary markets is lower for developers since they can absorb uncertain economic shocks due to lower investments compared to high-end markets in cosmopolitan cities.
Demographic Shifts and Migration Patterns
In the last decade, Ontario has witnessed a substantial pattern of movement of its population. Nowadays, many households and workers prefer to live in a spacious house with a vibrant lifestyle rather than living in major cities that are full of residential compromises and adjustments. Higher housing prices and congestion in urban cities, and remote job opportunities in recent times, have encouraged Ontarians to relocate or move to secondary markets.
The mindset of people has changed nowadays; they want bigger homes with an affordable cost of living and a slower pace of life, knitted in nature. Secondary markets in Ontario are also gaining popularity among the younger workforce due to emerging job markets, high-quality of life, access to nature, and lower living costs, for which they look for properties in cities like London, Kitchener–Waterloo, Kingston, and Niagara Falls.
Strong Local Economic Foundations
The Ontario secondary markets are not hobby markets; in fact, many of the locations have high employment growth rates for their diversified industries, such as Windsor and Cambridge, which are known for automotive manufacturing plants, and Kitchener–Waterloo is home to technology and innovation clusters. There are other cities with enormous job opportunities in sectors like education, healthcare, logistics, distribution hubs, government, and service industries. This consistent growth and sustainability in the regional economies have boosted the confidence of property developers to focus on the secondary markets.
Infrastructure Developments and Connectivity
The rapid infrastructure development and connectivity are another key factor why the secondary markets are in high demand in Ontario. The secondary markets across Ontario have witnessed progressive developments in transportation, utilities, and transit through major investments from the public and private sectors. Better connectivity to the urban cities makes the commute easier for employees and workers of multinational and other local companies, which encourages them to live in the secondary markets.
Moreover, the secondary markets are also investing in community infrastructures like libraries, restaurants & cafes, recreation centers, lush parks, gyms & fitness centers, cultural centers, community halls, gardens, etc. All these developments have boosted confidence not just in developers but also in buyers’ minds.
Policy and Planning Support
Policy and planning support from the municipal and provincial governments has played a vital role in the hyper-growth of the secondary markets. Municipalities of many secondary markets have changed their policies by removing the red tape and adopting expedited planning and permitting processes to attract real estate development. Some cities have even introduced incentives like Tax Increment Equivalent Grants (TIEGs), Community Improvement Plan (CIP) funding, affordable housing incentives, Brownfield Redevelopment grants, etc. Taking such supportive policy measures has played a supportive role in the growth of the construction markets.
Housing Demand Dynamics
For the last few years, Ontario’s housing market has been heating up due to demand consistently outpacing supply. While metropolitan cities experience their own growth, demand in secondary markets is surging—specifically for single-family homes, rental apartments, townhouses, and low-rise condominiums. Whether investors are looking for multi-family rentals or families are actively browsing Niagara Falls homes for sale, high pre-sale bookings and fast absorption rates have allowed developers to finance their projects smoothly and mitigate market risks. The rental market in secondary cities is also showing strong ROI, driven by young professionals unable to buy, relocating workers, and senior citizens downsizing into homes with modern amenities.
Quality of Life and Long-Term Attractiveness
The secondary market is beyond just managing a shelter, whether as a property owner or tenant. Quality of life is a compelling factor why secondary markets in Ontario are booming. Many households prefer living in secondary cities due to less congestion, shorter commutes, local culture, community life, and close-knit neighborhoods. Cities like London are home to breathtaking parks, Kingston has amazing waterfront views, and Kitchener–Waterloo is known as a major tech hub of Canada; these community identities attract construction developers and potential residents.
Resilience in Economic Uncertainty
During the major economic shocks and recessions, the real estate markets in the big cities go down due to low demand and vacant properties. But during the global economic meltdown back in the 2020s due to the pandemic, Ontario has witnessed resilience in the secondary markets. Not only during an economic crisis, but secondary cities have also been resilient when there is any risk in diversified local industries, and construction costs are competitive. This resilience has helped the secondary markets of Ontario outperform beyond expectations when major cities like Toronto and Ottawa have experienced slowed construction pipelines and low demand due to rising costs and regulatory pressures.
Our Take
Ontario’s secondary markets are blended in terms of affordability, demand, policy support, resilience, and quality of life that offer a lucrative package for property builders, investors, and residents. These secondary cities are just not living outside the big cities.
