Ontario real estate markets defy industry expectations
Confidence levels push sales and prices to new heights
Toronto, June 21 (Canada News Wire) – Despite concerns over a higher Canadian dollar and its impact on the province’s manufacturing sector, real estate markets across Ontario continue to perform above and beyond industry expectations, according to a report released today.
Stronger than expected consumer confidence levels have fuelled extraordinary demand for properties this year. The Ontario Market Trends Report, highlighting residential real estate activity in more than 30 major centres, found that sales were climbing in 85% (28 out of 33) of markets surveyed, while all but one market saw average price escalate.
“While an overall healthy economy has supported real estate activity, consumer confidence in the future of housing has taken markets to the next level,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Given current momentum, we expect demand for real estate to continue throughout the traditionally slower summer months and shatter existing records for sales and/or price in many markets by year-end.”
Average price has seen solid appreciation in the first five months of the year, with all but Windsor reporting an increase in values. The greatest gain occurred in Timmins, where the demand for residential properties prompted a 29% upswing in year-to-date average price, compared to one year ago. Double-digit increases in average price were also noted in Sudbury (22%), Haliburton (20%), Collingwood (10%) and North Bay (10%), Pembroke/Petawawa (10%) and Sarnia (10%).
“Affordability is a huge factor in the marketplace, with smaller, more reasonable-priced centres experiencing exponential growth this year,” explains Polzler. “This is especially true in communities within close proximity to the Greater Toronto Area – as far as Bowmanville to the east, Barrie to theÂ North, and Stratford to the west. Many purchasers are willing to sacrifice location for value, as long as it allows them to realize home ownership.”
Statistics Canada recently substantiated the trend. Between 2001 and 2006, six census metropolitan areas located in the Greater Golden Horseshoe reported population growth rates higher than the national average, including Barrie, Oshawa, Toronto, Kitchener, Guelph, and Brantford.
Empty-nesters and retirees are also setting down stakes for their golden years, returning to their original hometowns flush with equity gains realized in larger, metropolitan areas. In many instances, these purchasers are sparking demand for upper-end product – as evidenced by the 73% of markets reporting an uptick in luxury home sales in the first five months of the year.
“While Toronto real estate bidding wars tend to dominate headlines, multiple offers are also occurring in more than half of the markets surveyed in the Report,” says Polzler. “Limited inventory levels, particularly in hot pocket neighbourhoods, are seriously contributing to the increase in this phenomenon.”
Other highlights include:
* In-migration from other areas of the province has been a boon to residential real estate in small to mid-sized markets.
* Positive economic fundamentals have buyers spending more, with a growing number of first-time purchasers foregoing starter homes and opting for homes in the mid-range.
* The renovation trend now blankets southern Ontario, driving up real estate values across the board.
* Although the provincial average price now approaches $300,000, starting prices for entry-level houses can be as low as $100,000, making homeownership a realistic expectation for most Ontarians.
* Detached homes were most popular in markets across the province, accounting for the vast majority of sales. Alternatives such as condos and townhomes, just gaining a foothold in smaller centres, were not necessarily the more affordable choice.
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