Amidst news reports of soaring home prices and volatile real estate markets in cities like Vancouver and Toronto, local realtors have a much better diagnosis for the local Eastern Ontario market.
“I think we are in a very stable market in this area,” says Nicole Bonin-Bouchard, a realtor with Hawkesbury’s Remax agency. “We don’t have the same problems that the big cities have.”
This sentiment lines up with data from the Cornwall Real Estate Board, which shows an increase of 1.1 per cent in local home prices from 2015 to 2016 and the expectation for similar growth into this year.
The CREA quarterly forecast predicts the Eastern Ontario market will remain balanced in 2017 after a rise in sales in 2016 due to elevated supply.
Different realty realities
In comparing the local market to those of the big cities, Bonin-Bouchard describes the two as being on different ends of the real-estate spectrum.
“Here, we have a buyers’ market. We have had a surplus supply of homes on the market. In those cities, you have a shortage of supply, which creates bidding wars and leads to homes being worth much more than maybe they should be,” Bonin-Bouchard explains.
Of course, local home prices have increased overall due to inflation, but these increases (the aforementioned 1.1 per cent) remain in line with relative rates across the country, according to data from the Canadian Real Estate Association (CREA).
Conversely, home prices in Vancouver and Toronto continue to dwarf the national average despite recent measures implemented by governments in both areas to curb surging home prices, such as similarly designed taxes on foreign buyers. Although, recent data from the CREA does show a cooling trend of late in both areas, which the CREA believes could lead to a “soft landing” in the overall Canadian real estate market by 2018.
Still, not all experts agree with that assessment. The Canada Mortgage and Housing Corporation contends that the cooling effect will be short-lived, arguing that the change is more likely due to the perception of buyers and sellers that the market will change, rather than due to any direct effect on the underlying factors that lead to the inflated prices in the first place.
Both Bonin-Bouchard and the Cornwall Real Estate Board contend that foreign buyers are not a problem for the Eastern Ontario market.
Bonin-Bouchard says she sees a general trend towards older, retirement age buyers in the area, and fewer young families, given limited employment opportunities compared to the bigger cities.
“People come here to retire. Maybe to live near grandchildren in Montreal or Ottawa. But not as many young people are coming here. They’re going to the city because that’s where more of the work is.”
In terms of home types, Bonin-Bouchard mentions both attached and semi-detached bungalows as popular options in the local market.
The latest CREA forecast predicts that overall sales activity in Canada will decline by 1.5 per cent in 2017