Houses in Ontario continue to be out-of-reach for many buyers, despite some cuts in prices. The real estate market in Ontario has now reached a standstill, as many buyers demand that prices need to drop further. Outside factors like the war in Ukraine, high inflation, and increasing interest rates have all contributed to such steep real estate prices. Most buyers are now holding off until larger deductions in price are made. However, this is leaving sellers in a tricky position.
For more information on the current market conditions in Ontario, continue reading below.
Houses in Ontario Stray From the Projected Outcome for Summer 2022.
Many people made their bets on how the real estate market would progress throughout the summer of 2022. However, no one quite predicted the outcome that we are now seeing. Most officials assumed that the market would continue to produce a high volume of sales, dropping off near the end of the season. Although, it is now apparent that sales are slowing down faster, beyond what was originally expected. June is set to come in 25% below most sales projections for the month. This is the case for most regions in Ontario.
Despite the drop in sales, there has been an influx of inventory after such a slow spring. It is evident that sales and prices have fallen significantly in Ontario compared to surrounding provinces. This comes as a shock given such a steep climb in cost during COVID-19. High-interest rates can be seen as a reason for a decline in sales nationwide, specifically during May.
As of right now, buyers and sellers of houses in Ontario have reached a crossroads. Buyers refuse to pay such high prices and sellers are reluctant to make cuts in the price tag. However, it is estimated that a decline in housing costs is on the horizon. Sellers will soon be left with no choice but to knock a few zeros off their listings.
Furthermore, there has been a significant shift in the number of first-time buyers looking to purchase a home. Only 19% of potential first-time home buyers are interested in purchasing a property in the next few years. By contrast, in 2021 30% of potential first-time home buyers said that they would be likely to buy a home within the next few years.
Moreover, many individuals are finding it necessary to live closer to work, school and hobbies because of gas prices.
Could the Most Overpriced City in Canada be in Ontario?
While the Greater Toronto Area gets most of the press for astronomical housing prices, there is one Ontario city outside of the GTA that is making headlines for its high home costs. The City of Peterborough is considered to be one of the most overvalued housing markets in the country. Currently, this city sits atop the ranks with the steepest price valuations in Canada.
There are several reasons that have caused Peterborough to have such an overvalued housing market. For instance, Low-interest rates, blind bidding, and investor speculation.
The average household income is roughly $70,000 in Peterborough and the average selling price for a home was $836,843. It is clear that the housing market is unattainable for most residents. First-time local home buyers are struggling to make the dream of owning a home a reality.
Peterborough residents are going to need a large increase in inventory in order to bring down the cost of housing. The drop in demand that is present across Ontario could also have a positive effect on future market conditions.
Contact Us About Houses in Ontario.
We are hopeful that balance will restore in Ontario as buyer demand slows and sellers are forced to lower their prices. The remainder of the summer should see fewer sales as we head into fall. If you are curious about what Ontario real estate will be like in the coming months contact us today!
Whether you are looking to buy, sell or build we have you covered. For a more in-depth look at the current market conditions and how they will affect your real estate goals, reach out to us today. At The MYLIE Group, we have connections to several experts that can help you make your real estate dreams a reality! We look forward to making your life insanely easier this summer. Check back with us next month for more real estate-related news and information.