From cottage country to Calgary: When home flipping in Toronto got harder, renovators turned to these regions

Across Toronto, bungalows and other modest single-family homes are being replaced with trendier, pricier houses that have contributed to the city’s rising shelter costs.
But with today’s high housing prices and the more recent downturn in the real estate market, flipping in Toronto isn’t quite as easy or necessarily as lucrative as it once was.
As the market shifted, flippers also turned their attention to more affordable neighbourhoods outside of Toronto. 
The Star looked at three markets where flipping became commonplace during the pandemic — Hamilton, Kawartha Lakes and Calgary — to see the impact on those areas and where renovators are looking to next. 
While central Hamilton has been a hotbed for flipping because of a high inventory of relatively inexpensive single-family homes, flippers are stretching their dollars farther in the city’s fringes and beyond, says Conrad Zurini of Re/Max Escarpment Realty Inc.
Renovators have taken to places like Stoney Creek and smaller waterfront communities in the Niagara Region including Port Dalhousie and Port Colborne, where flipped single-family homes sell for 20 to 25 per cent more per square foot than their non-renovated counterparts, Zurini says. 
“It’s not crazy but there’s meat on the bones,” says Zurini. “Those properties that cluster around the water are at a premium and it just spreads throughout the community at a higher price.”
Zurini says flippers are also drawn to these pockets because of their high numbers of responsible seniors who have taken great care of the non-glamorous elements of their homes. 
“That generation really keeps the windows, furnace, air conditioning in good condition but they fall behind on the cosmetic changes,” he says, cueing an opportunity for renovators to make less costly but dramatic changes with kitchen and bathroom updates. 
Sixties-era brick bungalows with side entrances and the potential to become a duplex are a “primo” investment, he says.
Deep Singh recently completed a three-month glow-up of a bungalow in lower Stoney Creek below the escarpment, which he purchased in February for $667,500. The property was listed for nearly $800,000 but it was in major disrepair and languished on the market for more than two months. 
“After that amount of time,” Singh says, “people stop looking at those listings.”
Singh, a broker with Re/Max Escarpment who has a construction background and is a certified electrician, has since converted the house into a legal duplex, upgrading the electrical panel and adding a new custom kitchen as well as heated flooring in the washrooms.
He’s planning to list the property in the coming weeks for somewhere in the “high 900s.” 
According to a recent Re/Max Canada report, revitalization is one of the “most underestimated factors” behind rising housing values. 
The average single-family home in Stoney Creek sells for $897,000, up from $587,000 in 2019, says Zurini.
Hamilton still has a lucrative flipping market but it’s now shifted to the city’s northwest end of the mountain near Mohawk College where student rentals are still big business.
Flippers are scooping up single-family homes in the high $600,000 range and selling them for upwards of $800,000. In most cases, renovators are finishing basements with separate entrances and adding larger egress windows. 
Singh says the basement rentals typically command a rent of $2,000 monthly, which covers half the property’s mortgage.
“There’s a lot of that,” says Zurini. “That’s still going strong.”
Four years ago, the cottage overlooking Mitchell Lake in Kirkfield, Ont., had dated appliances, carpeted floors and a lacklustre exterior. But the humble bungalow offered three bedrooms, a boathouse, and an unobstructed view of the lake. In 2020, it sold for $330,000.
Today, the property has a new walkout balcony and sunrooms on the main and lower levels. It’s adorned with exposed wooden beams, modern finishes and upscale appliances. Outside is a private dock and boat lift, plus a renovated, furnished boathouse. It sold for $1.15 million this summer.
The cottage in Kirkfield is one of many waterfront properties in Kawartha Lakes to be purchased at a below-market price, flipped, and sold a few years later as a luxury property. Local realtors say the pandemic spurred a boom in cottage renovations among investors at the time, mostly intended for short-term rentals. But as interest rates rose and townships introduced restrictions on short-term renting, investors decided to cut their losses and sell the properties.
In Kawartha Lakes, prices of detached houses soared by 64 per cent in just five years to a median sale price of $670,000 this September, data on real estate listing platform HouseSigma shows.
“They were definitely picking up the low-end of the market inventory and converting that into the high-end,” said local realtor and contractor Stefan Faykos. “The bulk of the investors were finding the under-($500,000) properties that had lake access or a view and turning them into Airbnbs.”
Faykos has seen firsthand how prices have increased over the last five to 10 years. The former flipper said he can no longer afford to purchase income properties there.
“I’d … put in $60,000 or $80,000, sell it for $150,000 or $200,000 more, and move on,” Faykos said. “But when those values started going through the roof, it just became harder and harder.”
Realtors said the market has softened in recent months, and not all flips are successful.
“A lot of the buyers are seeing through some of the minor upgrades that are being done,” said local realtor Jason Richard. “Some of the sellers are trying to make, like, $200,000 on their purchase that they made in 2022 and it’s just not feasible in this market.”
The more recent dip in pricing, however, also means investors make more drastic renovations to ensure they’ll turn a profit if the market drops, resulting in more expensive homes hitting the market. 
Most often, homes that appear flipped are owned by numbered companies and family businesses, Faykos said.
Ken Malyon, president of real estate platform Property Guys, said common changes are winterizing cottages, upgrading kitchens and bathrooms and removing carpet with hardwood.
While the last few months has seen a slowdown in the market and a dip in prices, Faykos believes prices will continue to rise in the longer-term. 
“If people in that community hold out for their pricing, they may see a drop in volume, but you know that pricing will remain generally,” he said. “Eventually, it evens itself out, and it becomes a higher-end neighbourhood.”
Home flipping has taken the back seat in major Canadian cities over the last year as prices have declined from their pandemic peak, but Calgary is an outlier.
The number of homes bought and flipped within 12 months has dropped in Toronto, Vancouver and Montreal, but it’s ballooned in Calgary, where home prices have skyrocketed as the city attracts more interprovincial migration, primarily from expensive markets, motivated to find more affordable housing, experts say. 
“We’ve seen a rise of migration of people moving to Alberta,” said Lara Mitchell, sales representative with Royal LePage Benchmark in Calgary. “Real estate renovators see an opportunity to take undervalued homes, update them and make them esthetically beautiful. Buyers also want finished properties that are fully up to date.” 
It’s proven to be a lucrative opportunity for builders and developers looking to cash in on Calgary’s growing popularity. 
The benchmark residential price was $596,900 in September, a 5.5 per cent increase compared to the same time last year, according to the Calgary Real Estate Board. Year-over-year gains ranged from nearly nine per cent growth for detached homes to nearly 14 per cent gains in the apartment condominium market, but still prices are significantly lower than Toronto, where the average home price is over $1.1 million. 
“Compared to other major Canadian cities, Calgary’s housing prices are relatively affordable,” Mitchell said. “There’s a lower entry price, which makes it easier for investors to buy and develop for a profit.” 
Because home prices have accelerated since 2021, people can put minimal work into the home and let the naturally occurring price appreciation “do all the work,” said local Calgary broker Doug Koop. 
Home flipping, and added demand from newcomers, impacts pricing overall for the Calgary market, he said, making housing less affordable for locals who have lived in the city their whole lives. 
“It’s a completely different mindset when people from Toronto or Vancouver arrive and see they can buy a home for $600,000 instead of $1.8 million,” Koop added.
“That’s a huge difference.”