Lack of supply continues to drive up home prices

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As 2021 draws to a close, the local real estate market remains strong, with limited supply being the big story.

At the end of November, the average home price recorded year-to-date through the MLS system was $866,229, an increase of 30.3 per cent compared to a year ago. Nearly 2,600 homes were sold in the Lakelands West district in the first eleven months of the year, virtually flat with 2020 levels. The number of active listings year-to-date was down 45 per cent from last year.

Clearview, The Blue Mountains, Collingwood, Grey Highlands, Meaford and Wasaga Beach make up the Lakelands West district.

Chuck Murney, president of the newly merged Lakelands Association of Realtors reports that sales of non-waterfront residential properties remain strong with November 2021 the second best November on record, while sales of waterfront homes are back down to more seasonal levels.

Prices are beginning to diverge as well, with prices for non-waterfront homes rising to new record levels while prices for waterfront properties appear to be levelling off.

The staggering growth in the real estate market in the past year has been driven by the historically low cost of borrowing.

Statistics Canada and the Bank of Canada report that overall Canadian mortgage debt continued to rise at a record pace through the first eight months of 2021.

Beginning in September, the rate of growth began to slow. By October, the net increase in mortgage debt year over year was 11.5 billion dollars, down from the 14 billion dollar increase in October 2020.

Experts predict that as economic stimulus tapers and the central bank is forced to normalize rates, borrowing incentives will fade.

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