The Canadian housing market outlook for 2021 began and ended strongly, and 2022 appears to follow suit. Ontario, the most populous province in Canada, continues to attract homebuyers, and searches for houses for sale are at an all-time high.
It can be difficult for buyers looking to buy a home in Ontario to decide where to settle down. Home prices differ across the province, and external factors can influence how much they rise. In 2021, the Greater Toronto Area had the most expensive housing market in Ontario, with prices falling as you drove away from the GTA.
Here are some of the factors that influence houses for sale prices in Ontario:
To combat the effects of Covid, the Bank of Canada has reduced interest rates. The goal here is that these new interest rates will stimulate more demand in the market, thereby helping to lift the economy. Low inventory, on the other hand, will cause price increases for houses for sale, as sellers will want to get the best possible price.
The good news is that homebuyers can borrow more money at a lower interest rate. This could result in significant cost savings for buyers over time.
Previously, the mortgage stress test made it difficult for some first-time buyers to enter the market. However, the lower interest rate can help buyers qualify for a mortgage and search for larger or better houses for sale in less expensive areas outside of the Greater Toronto Area (GTA).
Houses for Sale Market Differences
Outside of Toronto, various housing markets in Ontario are generally less volatile. Many people begin their home search outside of the city, where they can find more affordable housing.
Detached houses and condominiums have seen double-digit price increases year over year. This is good news for homeowners and sellers, but it makes it difficult for buyers looking for houses for sale on a tight budget.
Price-conscious buyers are thus opting to live in the province's suburbs or rural areas and commute to Toronto for work. Houses for sale become more expensive as you get closer to the city.
House prices in other parts of Ontario are lower because there isn't the same level of demand as in Toronto. This means that homebuyers in these areas can take advantage of lower mortgage rates and lower property prices.
However, other Ontario cities are now exhibiting similar trends to Toronto. For example, London and St Thomas are in a seller's market, with significant year-over-year increases in average residential sale prices. Both cities continue to attract young professionals and investors from the Greater Toronto Area.
Supply and demand
Because of high demand and low supply, it is difficult to purchase an affordable home, particularly in large cities like. Due to land scarcity and the influx of immigrants in Toronto, more people need homes to live in, resulting in a limited supply of houses for sale.
Whether homebuyers relocate to Toronto and the surrounding area for better job opportunities, better amenities, or to be closer to public transportation, it is expected that demand will grow in lockstep with the city's development.
According to a recent report by the Ontario Ministry of Finance, the province's population is expected to grow by 38% by 2046, putting the province's population at around 19 million.
Nonetheless, the number of listings in Toronto and other urban markets continues to fall. Bidding wars and increased competition for desirable homes result from these market conditions. The market remains a seller's market, making it difficult to enter as a buyer.
Seasonal real estate trends
Seasonality trends in the Ontario real estate market can also influence real estate price increases.
Canadians emerge from their winter hibernation to buy homes in the spring and summer. The good weather can increase curb appeal for sellers, making their homes more appealing to homebuyers. As a result, sellers may be able to raise their prices due to increased demand.
Because of the busy home purchasing activity that occurred during the spring and summer seasons, the fall season may bring less inventory to the market. However, demand remains stable, so homebuyers should expect competition when trying to secure the home of their dreams.
Many people put their home searches on hold during the winter to avoid inclement weather. Traditionally, sellers focus on selling during the winter season; however, the decrease in demand may necessitate sellers lowering their asking price. However, market conditions have resulted in these being among the highest appreciation periods for the housing market.
Ontario's real estate prices show no signs of slowing, and the year 2022 looks promising. Market activity continues despite social distancing measures imposed by the coronavirus pandemic, according to trends from earlier this year. Many Ontario housing markets are considered seller's markets. However, homebuyers can take advantage of low interest rates to qualify for mortgages, purchase homes in areas with lower demand, and take advantage of seasonal real estate trends to try to get a leg up on the competition.
Looking for houses for sale in your market? Search MLS listings today to find you next dream home. Contact Realtown owner Yasir Khan, Sales Representative at RE/MAX.