Durham Region Real Estate Update
The Durham Region resale housing market is still breaking records with 1110 sales of single family homes in Durham Region in June reported Lloyd Elliott, President of the Durham Region Association of REALTORS® (formerly the Durham Region Real Estate Board). Even though this is an 8% decrease from 1194 sales in May, these numbers represent the best June performance ever in the history of the Association and also reflect a 16% increase over 955 sales in June of last year. “Regardless of the June numbers,” suggested President Elliott, “significant as these ratios may be in terms of housing market trends and establishing market value, the Durham resale market continues to attract new families (both immigrant and migrant) to the area. Buyers, whether purchasing a new home, or a resale are attracted by affordability, unlimited design features, award winning neighbourhoods, schools, assembly plants as well as economic viability and sustained growth.”
With the average selling price decreasing slightly to $271,394 from $275,695 last month, this is still 2% higher than last June’s average of $265,839. “ Even slight increases in year over year housing prices (comparable to cost of living) is a positive indicator suggesting the market, while exhibiting signs of cooling, remains resilient and indeed continues to move in a favourable direction,” stated President Elliott.
The total number of active listings on the MLS® system is down this month by 8% to 2583 from 2792 in May and shows a further 19% decrease from 3088 homes for sales in June of 2006. “ To date, 2007 has been an interesting year,” mused President Elliott, “ what began as the continuation of a strong buyers market of 2006 has morphed into a balanced market, and now appears to be on the threshold of a new sellers market.”
In the short term, (one year) what can buyers and sellers expect in the housing market? “The short answer is, (replay from most financial journals), mortgage interest rates will rise, perhaps twice by 2008. New home starts will trend slightly downward. And, a new fund-raising wrinkle, open to municipalities may infect the already onerous land transfer tax,” suggested Elliott.
The 1110 homes sold in June represent a $301,247,545 dollar volume, an 18.6% increase over $253,875,895 in June 2006.
Ontario Real Estate Report
Ontario housing markets defy industry expectations as confidence levels push sales and prices to new heights.
Despite concerns over a higher Canadian dollar and its impact on the province’s manufacturing sector, housing markets across Ontario continue to perform above and beyond industry expectations, according to a report released today by RE/MAX Ontario-Atlantic Canada.
Stronger than expected consumer confidence levels have fuelled extraordinary demand for properties this year. The REMAX Ontario Market Trends Report, highlighting residential real estate activity in more than 30 major centres, found that sales were climbing in 85 per cent (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 per cent 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 per cent upswing in year-to-date average price, compared to one year ago. Double-digit increases in average price were also noted in Sudbury (22 per cent), Haliburton (20 per cent), Collingwood (10 per cent) and North Bay (10 per cent), Pembroke/Petawawa (10 per cent) and Sarnia (10 per cent).
“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 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 per cent of markets reporting an uptick 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 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 product and opting for homes in the mid-range.
- The renovation trend now blankets southern Ontario, driving up values across the board.
- Although the provincial average price now approaches $300,000, starting prices for entry-level product 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 condominiums and townhomes, just gaining a foothold in smaller centres, were not necessarily the more affordable choice.
Durham Manufacturing Outlook
lagued all summer by a high Canadian dollar and increasingly expensive energy costs, the local manufacturing industry is still managing to defy sagging provincial trends. A report by the Conference Board of Canada found that despite a general slowdown in the Ontario manufacturing industry, Durham's local sector remained steady and strong. In fact, manufacturing output grew by a healthy 5.4% last year.
Alan Arcand, author of the report, says the positive outcome means that the local sector "has been better able to adjust to a higher dollar."
The report studied 20 of Canada's largest Census Metropolitan Areas, including the Oshawa CMA -- which consists of the City of Oshawa, the Town of Whitby, and the Municipality of Clarington.
"Oshawa's doing pretty well," Mr. Arcand said. "Especially compared to economies that, like Oshawa, have a big manufacturing sector."
And although 2006 will be a year of slower growth for Oshawa, which has enjoyed 10 years of strong economic results, Mr. Arcand predicts only sunny skies for the next three years.
Beginning in 2007, the Oshawa CMA is forecast to post the strongest average annual growth rate among all CMAs in the quarterly study. The report cites two major reasons for the strong showing: steady population growth and a slowly-improving manufacturing sector.
Liisa Ikavalko, senior economic development officer for the Region, says that the local manufacturing sector has been thriving.
"It has been pretty steady and pretty busy," she said.
For General Motors, 2006 is slated as a year of transition -- with the truck plant currently being retooled to build the new generation of GM pickups and the car plant being redesigned as a flex facility -- causing manufacturing output to slow to three per cent.
But, Mr. Arcand says, it will pick up when production of the new models begins next year, reaching a strong 4 per cent in 2007. The Conference Board anticipates that output will average 3.9 per cent per year from 2008 to 2010.
Ms. Ikavalko says that the main reason for the sunny predictions is GM's announcements of future investment in Oshawa.
"One of the best things that happens in a community is when there are many of these types of investments being made and publicized, is an increase in the confidence in the community," she said. "It really does affect people in their everyday lives. You see it in spending habits, you see it in entertainment habits. People will go to the movies because they are confident they will still have a job."