State of the Real Estate Market: January 2020
Curious to know how the real estate market is doing in Ontario, Manitoba, and Alberta? We thought so.
Our monthly update will help you better understand the current state of the market so you can make informed decisions with your real estate purchases.
The Toronto Regional Real Estate Board (TRREB) reports1 the GTA experiencing strong sales growth with a 15.4% increase compared to January 2019. TREB’s President Michael Collins commented, “We started 2020 where 2019 left off, with very strong growth in the number of sales up against a continued dip in the number of new and available listings. Tighter market conditions compared to a year ago resulted in much stronger growth in average selling prices. Steady population growth, low unemployment and low borrowing costs continued to underpin substantial competition between buyers in all major market segments.” Supply continues to be an issue in the GTA with number of active listings down a substantial 35% year-over-year, which continues to fuel accelerated price growth. This has caused increased competition amongst homebuyers for the limited supply available; as a result, listing days on market has decreased from 33 to 27 days, or 18.2%, year-over-year. The average selling price for a home in Toronto is $839,363, a year-over-year increase of 12.3%.
The Ottawa real estate market2 saw a decline in January sales with 780 residential properties sold, resulting in a 4.5% year-over-year decrease. OREB President Deborah Burgoyne commented, “2020 is off to a slower start as the shortage of inventory is now impacting market momentum. Although we have higher sales than the five-year average, due to increased condo sales, the persistent supply challenges seem to have finally caught up with us. Furthermore, the number of new listings that came on the market in January (1,082) is well below the average (1,651).” More listings are needed in the Ottawa market for all home types to help balance market conditions. And although home prices are higher than average due to lack of supply, Burgoyne says prices are not likely to decrease so if you can get into the market now, don’t wait. The average selling price for a condominium-class property is $338,077, and the average selling price for a residential-class property is $516,229, a year-over-year increase of 19.1% and 19.3% respectively.
In the Hamilton-Burlington region3, sales numbers have recovered after a slow December with a year-over-year increase of 5% and an increase of 18.3% from December. REALTORS® Association of Hamilton-Burlington (RAHB) President Kathy Della-Nebbia reports, “Buyers seem to be coming out early, so sellers shouldn’t feel the need to wait for the spring market to get a great value for their property. We expect the spring market will be strong with more competition between sellers, as many wait for the flowers to bloom to market their homes.” Townhomes have particularly been in demand in the RAHB market, likely due to the affordable price point for space purchased. Price increases in all property types occurred, but sales activity varied. The RAHB market saw a decrease in sales activity for apartment-style homes and townhomes with year-over-year decreases of 1.4% and 6.2% respectively. However, sales of detached residential properties increased 10% year-over-year. The average selling price for a home in Hamilton-Burlington region is $617,496, a year-over-year increase of 11.9%.
Home sales continued to slow down in the Kitchener-Waterloo region4 with a moderate decrease of 8.2% compared to January 2019. Sales are also below the 10-year and 5-year averages at 3.6% and 3.8% respectively. KWAR President Colleen Koehler comments, “For the third consecutive month sales were down in January. Slower January sales are a result of fewer homes being put up for sale. This is causing further price acceleration as we have enough willing and able homebuyers contending for those few homes that are available.” The increased demand for housing is reflective of the low number of days on market at 22 days, 5 days less than January 2019. Compared to January 2019, there are 38.7% less active listings on market in January 2020. The average selling price for a home in Kitchener-Waterloo is $561,029, a year-over-year increase of 15.7%.
The London and St. Thomas Association of REALTORS® (LSTAR) reported5 the second best January since 1978 on record with 568 homes sold, only two sales shy of beating the record. London region’s overall sales-to-new-listings ratio is moving towards more balanced conditions after being 110% last month6; a sales-to-new-listings ratio over 60% is considered by the Canadian Real Estate Association (CREA) to favour sellers. Blair Campbell, 2020 LSTAR President, commented, “Despite the high number of home sales and the increasing house prices, the number of new listings that hit the local market in January 2020 saw a 9.4% increase over last year, which brought last month’s sales-to-new-listings ratio to 60.5%. This increase in listings for the month is fantastic as the lack of inventory has been a significant concern over the past two years.” Looking at January 2010 compared to January 2020, home prices have increased 95.2%, meaning homes have almost doubled in value over 10 years. The average selling price for a home in the London region is $437,197, a year-over-year increase of 13.9%.
Windsor-Essex County7 experienced a decrease in year-over year market activity of 6.8% with sales down 21.6%. Looking at year-to-date sales, the largest price range where homes were sold is typically in the $300,000-$359,999 range for Windsor region. However, this month, the $360,000-$419,999 is equal to the $300,000-$359,999 range for number of sales. This is likely due to the average selling price for the region increasing substantially. The average selling price for a home in the Windsor region is $379,813, a year-over-year increase of 24.8%.
The Winnipeg real estate market8 saw another strong month after a record breaking 2019. Home sales increased 15% year-over-year and are 18% above the 5-year average. Winnipeg is still an affordable city for Canadians. In January, 78% of detached homes sold for under $399,999. As for condos, 85% of them sold for under $300,000. “Lots of choice and options for buyers in 2020 and that will prevail in February and into the spring. This is in stark contrast to a number of other housing markets in the country where they are concerned about a housing supply shortage,” commented Catherine Shellenberg, president of WinnipegREALTORS®. The average selling price for a single-family home is $310,433 and the average for condominiums is $217,213, a year-over-year increase of 1.6% and increase of 9.5% respectively.
The Alberta Real Estate Association (AREA)9 saw a slight increase in sales which helped to reduce supply levels in January. In Calgary, sales activity improved almost 12% and new listings fell almost 8%. This has allowed some of the oversupply in Calgary to be chiselled away at, though price declines continue. Calgary currently has an oversupply of six months compared to eight months last January. In Edmonton, new listings are down which has helped inventory levels ease to have a nine-month level of supply, compared to the ten-month supply of January 2019. Higher priced home sales in the region have brought up the average selling price. Regardless of this, Ann-Marie Lurie, AREA Chief Economist comments, “Despite modest gains, it is important to note that conditions have shifted in the past five years and since the energy sector adjustment, we are left with a housing market that has slower levels of demand, higher amounts of inventory, and prices that remain lower than 2014 highs.” Slowly but surely, the Alberta real estate market is improving.
Randall Weese is a licensed REALTOR® with 13 years’ experience in Ontario who currently holds Broker licenses in Ontario, Manitoba and Alberta. Randall has worked in a variety of business models within the real estate industry. He has been a REALTOR® at one of the largest brokerages in Canada, managed a boutique brokerage, and founded and operated his own brokerage in the Greater Toronto Area; all in addition to acting as a listing agent on thousands of homes across the country during his career. Randall is currently working at Purplebricks where he is the Broker of Record for Ontario, Broker for Alberta and Associate Broker for Manitoba. Furthermore, he oversees Purplebricks’ Customer Service and Compliance departments.
1 TRREB January 2020 Market Update
2 OREB January 2020 Market Update
3 RAHB January 2020 Market Update
4 KWAR January 2020 Market Update
5 LSTAR January 2020 Market Update
6 LSTAR December 2019 Market Update
7 WECAR January 2020 Market Update
8 Winnipeg REALTORS® January 2020 Market Update
9 AREA January 2020 Market Update