Could Ontario’s real estate market keep up its strong 2020 momentum into 2021? The province has all the right factors: super low interest rates, high demand, and not enough homes for sale – a recipe that’s been pushing prices up by double digits. And this isn’t just happening in big cities, but smaller towns too.
Cambridge, Ontario has seen some serious growth over the last nine months. That’s because people from bigger cities are looking for more space, and there aren’t many homes available. But will Cambridge, part of the Waterloo region, keep this pace going through this year?
The Canadian Real Estate Association (CREA) recently released a forecast showing average home prices in Ontario could jump by over 16 percent in 2021.
According to CREA’s report, “strong demand for several years, particularly outside of Toronto, which has eroded active supply in the province.” They add that “The strength of demand, particularly for larger single-family properties, will drive the average price higher as potential buyers compete for the most desirable properties.”
So long as buyers stay interested, Cambridge might remain a seller’s market. But before we look ahead to what’s next, let’s check out what actually happened in 2020.
The Real Estate Scene in Cambridge You Should Know About
Turns out Cambridge finished 2020 on a high note despite a rough start when COVID first hit.
The Cambridge Association of REALTORS® reported residential sales shot up by 66.3 percent in December compared to last year – setting a new record for December sales. Overall home sales rose by 15.2 percent that year hitting an all-time annual peak at 2,722 units sold.
Home prices climbed too – jumping 27.2 percent to $692,822 in December versus the previous year. The yearly average price went up by 20.1 percent to $626,528 while the composite benchmark price increased by 21.4 percent reaching $631,800.
Wondering how different types of homes did last December?
Single-Family: +21.6 per cent to $644,300
Townhouse: +24.4 per cent to $471,200
Apartment: +13.2 per cent to $531,500
The number of active listings dropped sharply – down 60.9 percent hitting a three-decade low – even though new listings were up by 22.4 percent that month alone. By December’s end there was only about 0.4 months worth of inventory left at current sales rates; normally it takes around 2.5 months’ supply.
John Teixeira from the Cambridge Association of REALTORS® said it best: “2020 saw many people prioritize more space as well as the safety and security of home ownership,” He added that “The increased demand for properties saw more homes trade over the course of the year than in any year going back on record… This has pushed overall inventory levels to extremely low levels and have pushed prices to new highs.”
Are People Leaving Big Cities for Smaller Towns?
A big story last year was folks moving out from major cities into smaller towns or rural areas nearby. While calling it an “exodus” might be stretching it a bit much, data does show lots leaving big city life behind looking for something quieter and more affordable.
A Statistics Canada report pointed out that urban dwellers are swapping tiny apartments (think under 700 square feet) for bigger places where they can spread out without so much crowding – totally understandable given all those social distancing rules we’ve had everywhere lately. The study found Montreal lost about 24,880 residents while Toronto saw about 50,375 people move away between July ’19 and July ’20. In Ontario specifically Oshawa plus Kitchener-Waterloo-Cambridge showed fastest growth rates rising roughly two percent each.
The report also highlighted that combined population numbers across Cambridge-Kitchener-Waterloo grew over fifty thousand people during five years leading up till mid-2020. Last tally placed their regional population at almost six hundred thousand compared with just over half a million back in ’16.
Researchers say various reasons explain these shifts but noted “urban sprawl is an important trend to monitor.”
The report adds “The desire to live outside largest urban centres was also reflected in rapidly increasing housing costs.. a trend continuing despite pandemic conditions,” saying also “Personal health… remote work ability…and higher housing costs” all play parts influencing many Canadians’ choices about living outside hard-hit big cities now or going forward.”
So is it likely Waterloo region will do just as well or better than last year?
A Look Ahead at What Could Come In Cambridge Real Estate This Year
This area covering Cambridge along with Kitchener and Waterloo looks set to keep being favorable toward sellers throughout this year. Still tight supplies plus growing buyer interest combined with historically cheap borrowing costs should keep sending prices upward. According to Kitchener Waterloo Housing Market Outlook (2021), total residential sales are expected climb seven percent reaching nearly $675K average price across all types. Could be anything from fancy houses down to condos-homebuyers here get decent value compared with other places really trying hard just get inside market these days.
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