When it comes to residential real estate, you can expect to hear a whole lot more this year about high demand and low supply.
And Waterloo Region is far from the only place where a lack of people listing their homes for sale is causing double-digit growth in sales prices.
New figures show that the issue is also prevalent in Guelph, the Greater Toronto Area, and other urban and suburban pockets of southern Ontario.
Real estate boards across Canada released their 2016 year-end data on Thursday.
In Toronto, the Toronto Real Estate Board reported 113,133 residential property sales – an increase of 11.8 per cent over the year before. The average sale price also rose to $729,922, which represented a year-over-year increase of 17.3 per cent.
While Toronto might be hogging the headlines, the numbers there aren’t that far off what local real estate agents found over the course of the previous year.
Industry insiders there said that while the perception exists that foreign buyers are to blame for the rising prices, the biggest problem is low inventory of both resale homes and new builds.
Areas serviced by the Guelph and District Association of Realtors – which includes Guelph, most of Wellington County and some rural communities between Guelph and Milton – saw 3,235 homes change hands in 2016.
That number represents an 8.7 per cent increase from 2015, and marks the first time the association has seen more than 3,000 residential sales.
Prices rose as well, with the 2016 average sale price coming in at $426,563 – 12.7 per cent higher than it was in 2015.
There, too, real estate agents chalked up the price increase to high demand and low supply – two trends which don’t seem likely to disappear anytime soon.
“It may prove a challenge to see as many sales in 2017 given that we started the year with just 131 properties listed for sale,” association president Kim Hannah said in a news release.
In contrast, there were about 300 properties listed for sale in the area at the start of 2016.
The Kitchener-Waterloo Association of Realtors, which looks after real estate activity in Kitchener, Waterloo, Wellesley, Wilmot and Woolwich, reported a total of 6,655 residential sales in 2016 – an 18.1 per cent increase over the year before.
Those properties sold for an average price of $387,404, or 10.8 per cent higher than 2015’s average price.
In a press release, KWAR president James Craig cited the same two factors as buoying the local market: “unrelenting demand” and fewer homes being listed for sale.
“While this puts sellers in a very strong position, it’s not so easy when those same sellers need to downsize or move up.”
In 2007, when the local economy was at its peak pre-recession strength, there was almost as much activity in the Kitchener-Waterloo residential real estate market, but average sale prices were about 35 per cent lower than they were in 2016.
Larry Masseo, a vice-president of the Waterloo Region Homebuilders Association, says the activity can be explained in part as a ripple effect from the high demand and low supply in Toronto, which has sent people there further and further away in search of a more affordable place to call home.
“We are seeing more and more people that are taking the drive down the 401 to seek the kind of housing that they want, at a price that is still substantially less than (in) the Greater Toronto Area,” he said in an interview.
Matteo said that he expects the trends seen in the local housing market to continue in 2017, although he sees anything beyond that as being uncertain at this point.
With reporting by Rosie Del Campo and files from The Canadian Press