Confidence pushes Ontario housing sales and prices

Source: Construction Digital

Date :6/22/2007 8:44:26 AM

Despite concerns, Ontario housing markets perform above industry expectations, according to RE/MAX Ontario-Atlantic Canada report.

Stronger than expected, consumer confidence levels have fuelled extraordinary demand for properties this year, says the REMAX Ontario Market Trends Report which highlights residential real estate activity in more than 30 major centers. The report found that sales were climbing in 85 percent (28 out of 33) of markets surveyed, while all but one market saw average price escalate. Parry Sound, Clarington/Bowmanville/Newcastle, Trenton, Belleville, North Bay and Pembroke lead the province in terms of percentage increase in unit sales, with double-digit gains of 20, 17, 15, 15, 12, and 11 percent respectively.

"While an overall healthy economy has supported home-buying 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 housing 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 percent upswing in year-to-date average price, compared to one year ago. Double-digit increases in average price were also noted in Sudbury (22 percent), Haliburton (20 percent), Collingwood (10 percent) and North Bay (10 percent), Pembroke/Petawawa (10 percent) and Sarnia (10 percent).

"Affordability is a huge factor in the marketplace, with smaller, more reasonable-priced centers 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 the north, and Stratford to the west. Many purchasers are willing to sacrifice location for value, as long as it allows them to realize homeownership."

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 percent of markets reporting an increase in luxury home sales in the first five months of the year.

"While the GTA's bidding wars tend to dominate headlines, multiple offers are also occurring in more than half of the markets surveyed in the RE/MAX Report," says Polzler. "Limited inventory levels, particularly in hot pocket neighborhoods, are seriously contributing to the increase in this phenomenon."