The Canadian real estate market is starving for new supply. Over the last 14 months, demand for housing has skyrocketed, from major urban centers to rural communities alike. Everybody wants to take advantage of historically low interest rates and dive into the housing market. The problem? Insufficient housing stocks, leading to a challenging environment of bidding wars and blind bidding, which has triggered a tremendous spike in valuations.
Are first-time homebuyers and young families being priced out of the real estate market nationwide? The affordability crisis, according to industry experts, is intensifying. It is becoming a challenge to save up enough for a down payment or find a home with a conservative budget.
In recent months, there have been recommendations that the government should intervene, and the Bank of Canada (BoC) should begin to normalize monetary policy by raising rates. But while stress tests and rate hikes might offer short-term ways to cooling down a red-hot real estate market, the long-term solution is additional inventory coming to market.
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While the market cooled slightly in the Quad cities (Guelph, KW, & Cambridge) in May, it heated up slightly in Puslinch. The number of sales increased 25% from the previous month. The average sale price for May jumped up to $1,690,000, up 23% from April and the average time on market for MLS sales was 56 days. Happy sellers received on average 104% of their asking price which means that homes attracted multiple offers and sold slightly over asking price. Going forward into June, there are only 18 active listings in Puslinch which represents about 1 month worth of housing inventory.
While the market was red hot in Puslinch, the regional market slowed down slightly in May for the second straight month and I’ve started to see some conditional offers appear on the daily hot sheet. This is good news because it means that some buyers were able to make conditional offers and get them accepted. However, even though the market is gradually slowing down, this is still an extreme seller’s market with very low inventory so homes should continue to sell quickly and in many cases, over asking price.
Are you thinking of making a move in 2021? Put RE/MAX, real estate’s premier brand and my 20+ years of experience to work for you! Call/text/email/DM me and let’s get started with a free home evaluation and custom marketing plan!
Dean Manton Broker
RE/MAX Real Estate Centre Inc