Peterborough Real Estate Most Overheated in Canada

It’s perhaps not a contest we would want to win, but according to a report by the Canadian Real Estate Association, the Peterborough area is the hottest market in the country.  

While other markets around the GTA have softened with lower sales, the Peterborough area recorded a very slight dip in volume accompanied by a 37.4% rise in average price in the month of March based on the MLS® Home Price Index (HPI) which is a benchmark indicator used in the real estate profession.  While home sales dipped slightly that month over the previous year, it remained 31.5% higher than the five year average.  The rate of price increase also seemed to be accelerating, as the three month price hike was 23.6%.

“March was quite the extraordinary month for home sales. Many other markets around the Greater Golden Horseshoe had sales activity well below the same time last year but here we are nearly setting new record (sic) for the month,” said Kate Kidd, President of the Peterborough and the Kawarthas Association of REALTORS® Inc. “New listings have been supportive for housing activity but are still being outpaced by demand from home buyers. As a result, overall inventories remain at rock-bottom levels and market tightness is driving benchmark price growth of well over 30%.”

The Peterborough and the Kawarthas Association of REALTORS® Inc. report also indicated that the area recorded the largest dollar value of homes sold in any month in history. Despite more new listings coming on stream in March 2022 than any March in more than five years, active residential listings were the lowest for the month of March in more than two decades, at 47.1% below the five-year average and 69.9% below the 10-year average for the month of March.  The active listings that month represented .6 of a month of inventory, which is normally 2.9 months at this time of year.  This means that on average it would take only 18 days to sell all listed properties.

According to local realtor Kathie Lycett, this boom in the local market can be partly explained by the push to move outside urban centres fueled by the increase work-from-home activity which began with Covid.  Those who must commute have access to reliable transportation in the GO transit system, and the expansion and renovation of the GO train network to Clarington promises to provide more options in the future.  Further ahead, the proposed high-speed train that just received initial funding approval in the last federal budget will provide another commuting alternative to Toronto.  Another factor in the price pressure is that historically this area has been underpriced relative to options west of Toronto, which have always attracted a premium.  Kathie believes prices are just rebalancing to correct this discount the area has faced in the past.  There is also a growing appreciation of the ease of access to cottage properties in the Kawarthas which have also been underpriced relative to their Muskoka counterparts.

Higher prices might seem like good news for property owners, but those considering taking the leap and selling to take advantage of this trend also face the other side of the coin- where to go from here?  Low listing inventories may well continue when (if?) given projected interest rate increases hit demand.  If that occurs, we may find that a lull in the market offers first time buyers a window to jump in.  KG

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