We are currently experiencing a shift in the market specifically when it comes to multiple offers on offer night. Less offers are being presented and some properties not receiving any offers at all. As a result homes are being relisted with a price change. At present in Oakville, we have 405 Homes for sale and of those, 62 homes have had a price change. Meaning 15% of homes have a price change higher or lower than the initial list price. As a result we are seeing more homes on the market without a set offer date and priced closer to market value.
Inventory is on the rise as usual in the Spring market. With the combination of less offers and more inventory since January 2022, there is greater purchasing power than in the last few months.
Despite the slight shift, we are still in a Seller’s market and the average house price continues to climb slowly. As per RBC Economics, Canada’s Benchmark price is forecasted to rise 6.2% in 2022 which is a third lower than last years growth rate of 17.8%.
If you took a pause or experienced fatigue in the winter months, now is a good time to re enter the market. You will have more options to choose from and less competition than previous months.
It is still a Seller’s market, however there may be fewer showings resulting in fewer offers. Properties are now priced closer to market value. There is no reason to be discouraged as the average home sale price is increasing month over month and year over year. You will continue to see a strong return on your investment.
Ontario has recently introduced an increase in Foreign Buyer’s Tax from 15% to 20%. This change will impact not only individuals buying for investment, but also those arriving on a work Visa who would like to purchase a home.
In summary this tax only represents approximately 5% of Buyers in our market. Therefore we do not believe this will have a strong impact on current market activity.
On March 2nd we had a 0.5% increase in rates. We are expected to see a marginal increase 4 or more times this year and as a result Buyers will be required to meet the new Mortgage Stress Test guidelines. Rates are still at an all time low and an increase has caused some speculation, but in our opinion we don’t believe this will have a direct impact on average sale prices at this time due to strong demand in the housing market.
As Canada plans to welcome over 400,000 permanent residents in 2022 the market will remain strong as a Seller’s market. We are still experiencing historically low inventory levels year over year. The GTA and surrounding areas need approximately 30% more housing units to meet the demand.
In summary, “this is a year of transition not transformation. The overall landscape for housing will begin to shift in 2022 but we don’t expect abrupt changes. These will be the first steps on a long road to normalization. We do expect 2022 will be a remarkable year by almost any standard…unless you compare it to 2021.” (Source: RBC Economics)
Please don’t hesitate to contact us for your complimentary home evaluation.