All sorts of talk about migrations these days, and it’s not just humans that have been migrating apparently. Many are now choosing to say that the housing unaffordability issue in Canada has done some migrating of its own. What is meant by that is housing unaffordability has moved out of the big major metro areas that have long been seen as ‘desirable’ and into smaller town Canada where homes were still reasonably priced until recently. This is a trend that’s been even more in focus for the last nearly 2 years, and it’s something to look at if you work in the Real Estate business.
For starters, this is a positive development for people in these less-populated areas of the country who are hoping to sell their home. Even more so for older homeowners who have been planning to have that fund their retirement and now have the possibility of an even better one with the fact they’re home is likely to sell for more. This is beneficial for the realtor working with them too, but one thing that has always been true is that it can be tough to make a living in real estate in smaller communities, and especially if there’s already many realtors working there.
Our online real estate lead generator here at Real Estate Leads is a great way of leveling that playing field for realtors who need it. It puts you immediately in touch with folks who have shown their willingness to either buy or sell a home in that area, and you get the advantage of being the only realtor who receives the leads.
A rise in median home prices in a region can’t be necessarily connected to housing unaffordability, as that is always going to be a relative term. But if it’s to be seen as a plus then where are the locations in Canada where we’ve seen biggest real estate value gains?
That’s what we will look at here this week.
Picking up Steam
The CREA recently released data showing that indicates sales are down 17.5% from the scorching pace we saw over September last year, but then being up 0.9% month over month to counter that some. September 2020 had the market setting a record for the month, but September 21 wasn’t bad either and came in as the second-highest September on record for sales. It also saw the first month-over-month increase since March.
Further, the national benchmark price increased 1.7% month-over-month and 21.5% year-over-year. Halifax is often referred to as the Victoria of the East Coast, and real estate there is up 27.5% this year. Montreal has always been a popular location but to have it up 15.5% over the same time is something that is unusual too.
But the really big gains are being seen in much smaller centers where house price gains have only ever occurred very modestly if at all.
Here’s the list of them
- Kawartha Lakes (Ontario) – up 33.1%
- Woodstock Ingersoll (Ontario) – up 33.1%
- Kitchener Waterloo – up 33%
- Lakelands (Ontario) – up 32.1%
- North Bay – up 32.1%
- Vancouver Island – up 31.9%
- London St. Thomas – up 31.7%
- Cambridge – up 31.7%
- Peterborough Kawartha – up 31.6%
- Chilliwack and District (BC) – up 31.6%
- Northumberland Hills (Ontario) – up 28.1%
- BC Interior Region – up 27.7%
- Oakville Milton – up 26.9%
- Hamilton Burlington – up 26.6%
- Guelph District – 26.4%
Lack of Homes for Sale a Key Factor behind Price Gains
The current estimates are that we haven’t improved on the 2 months of national inventory that has been the market reality for well over a year now. This is going to be very integral to how the behaviour of prices goes, and even though the acceleration in home prices seen for September was more than we expected, the fact that prices are now moving back in that direction is also not coming as a surprise to industry experts.
It’s also true that mortgage rates could be a factor, but more realistically ongoing supply issues (shortages) will have price gains continuing to accelerate. At least for the short foreseeable future. However, with demand continuing to be at historically high levels, listing being quickly absorbed, and price growth running steady near a 20% pace it is very likely that this isn’t a short-term phenomenon.
There is a belief that because of these market realities 5-year fixed mortgage rates are going to have real upside in the months ahead, and that could work to have a dampening effect.
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