Real estate market may have topped out
The recent cooling in the real estate market is just the beginning according to Oxford Economics Group, an independent global advisory firm. In a recent report, the firm predicts Canadian home prices will fall 24 per cent by 2024, wiping out most of the gains made since the start of 2020.
Tony Stillo, Oxford’s Director of Economics says rising rates, record un-affordability, and policies to curb demand and boost supply will all contribute to declining home prices.
Bank of Montreal senior economist Robert Kavcic says all it took was a nudge in interest rates to change the mood of the market and adds when we speak of a market correction it’s not a question of if but where, how much and for how long.
BMO warns that suburban markets in Ontario are particularly vulnerable and that markets with “less exuberant” valuations will hold up better.
On the local front, data from the Lakelands Association of Realtors (LAR) shows that April home sales recorded through the MLS system were down to a more typical level for this time of year. For the Lakelands West Region which includes Clearview, Collingwood,
The Blue Mountains, Grey Highlands and Wasaga Beach, the dollar volume of sales last month was just over $208 million, down 21.3 per cent from April 2021. A total of 204 units were sold, down sharply from the April 2021 total of 313 units, but still abovethe five year average for the month. Even as the number of units sold declined, the average price topped $1,020,000 up 21 per cent from a year ago, and the median price rose 18 per cent to $855,500.
Homes took a bit longer to sell in Lakelands West in April with median days on the market increasing from seven days in April 2021 to 10 days this year.
Months of inventory, which is a measure of how long it would take to sell all homes currently listed on the MLS system at the current rate of sales now sits at 1.3 months, up from one month a year ago.
Chuck Murney, President LAR says “Supply levels are still at historical lows which means that if we see a continued moderation in sales activity, there is ample room for the market to absorb a welcome increase in available listings. Prices are still trending near all-time highs but have begun to show signs of topping out.”
