Homeownership in Canada
When it comes to homeownership in Canada there’s a lot to know and to prepare for. It can sometimes be difficult for young prospective buyers new to the market. This is due to the rising housing prices that we’ve seen over the past few years.
There was a high demand in 2020 but a low inventory which caused the housing prices to rise. This created what we call a sellers market, meaning that the seller can look for the best offer on their property, causing the seller to go for the best offer. This is usually higher than what the asking price was to begin with.
In a 2016 Canadian census, it was reported that in the year 2000 the rate of homeownership was just below 64 per cent and increased to 68.55 per cent by 2020. This was based on a group ages 55-64. “The 2016 Canadian census provided some helpful information for professionals and homeowners alike. While the data is from several years ago, it still provides a solid snapshot of what home ownership is like in Canada.”
It was also reported that, “78% of homeowners are couples, some with children and some without. Royal LePage Signature Realty also reported that around 48% of young buyers in the 25-35 age group owned their own home. As well, 92% of these young people have a positive association with real estate investments and believe that purchasing a home is a good financial investment.”
This census also indicated that many of these homeowners had a higher education than secondary school and had a higher income. It also indicated that this group of homeowners had responsible spending habits. As of 2022 we know this may have changed because there have been many individuals that have been affected by the ongoing pandemic.
Real Estate Market Statistics
While it is true that the ongoing pandemic has had an impact on many industries and the economy, real estate saw on of its biggest booms. According to the Canadian Real Estate Association (CREA), there were a reported 551,000 homeowners that were able to purchase a home in 2020 and 2021. The pandemic caused mortgage rates to drop which lead to low borrowing rates and also low interest rates.
“Because of this, many buyers realized that they could purchase a home and lock in a low interest rate with a low monthly mortgage payment. This led to high demand for houses and a shortage of houses on the market.”
COVID-19 and the Real Estate Market
It was also reported that the pandemic caused there to be more out of town buyers. They were purchasing residential properties outside of the larger cities to move to more rural locations. Due to this we saw the median cost of residential property rise 52.9 per cent in places such as Muskoka to $625,000.
While some chose to still buy and sell during the pandemic, there were some who decided not to make any moves. This was due to the fact that for a while there were no in-person open houses and everything was moved to online. However, it was still reported that 84 per cent of potential new homeowners stated that they still plan to buy a new home in the near future.
When it comes to the affordability of housing in Canada there’s a lot to consider. According to the CREA, the average price of a residential property rose more than had been previously predicted. By mid 2021 the price had risen to over $700,000.
This rise in the price of a residential property caused there to be an increase in monthly mortgage payments, causing there to be a rise in the downpayment. This then caused there to be less entry level housing for new homeowners. We can take a look at the December 2021 real estate market statistics to see what it was like for buyers in Burlington, Ontario.
Burlington Real Estate Market Statistics for December 2021
According to the REALTORS® Association of Hamilton-Burlington (RAHB), there were a total of 811 sales of residential properties in the entire RAHB market area. Sales in the area saw a decrease of 32 per cent since the previous month, and an 11 per cent decrease compared to the same time last year.
In December 2021, it was reported that there was a 50 per cent decrease in new listings when compared to November 2021. There was a six per cent decrease in new listings since December 2020. The average price of a residential property was $931,787 in the entire RAHB market area. This was a two per cent increase compared to the previous month and a 27 per cent increase compared to the same time last year.
In Burlington, the price of a residential property was $1,221,317 with a total of 136 sales. This was a 26 per cent increase when compared to the same time last year. The median price of a home in December 2021 was reported to be $1,155,000, which is a 36.9 per cent increase.
“December 2021 saw a new residential average sale price record to close out the year. The number of properties changing hands in December did not rival the momentum from December 2020, however, we have never seen the months of inventory and active listings available this low before. Generally, most people wait until after the holidays to list their homes, but with approximately 300 residential properties on the market heading into 2022, we are expecting to continue to see tight conditions with such low levels of supply.” RAHB President Lou Piriano
Contact Lori VanDinther and Team
There are a lot of real estate statistics talked about in our blog this month, it’s important to see what’s going on in the market. This way we can better understand why prices and mortgage rates are they way they are. If have any questions about these statistics my team and I would be happy to help.
You can contact us, we love getting to connect with our clients, to help you find the home of your dreams in Burlington, Ontario and surrounding areas. Please contact me either by email at firstname.lastname@example.org, or by phone at 905-632-2199.