Residential real estate values in the Peterborough area in 2016 rose 10%, a rate which began to escalate at the end of the year.
Competition for residential properties is heating up, and the practice of waiting a week or more between the listing date and the review of offers which has been common in the GTA is now happening in Peterborough.
According to Bethany Real Estate realtor Kathie Lycett, it is now common place to have competing offers on residential properties in the $200,000 to$300,000 range in Peterborough. This was confirmed by Exit Realty Broker Mary Ellen McCamus, who is experiencing multiple offers from buyers with no home inspection conditions, and many above the list price. Lycett believes the practise of holding off before accepting offers on a new listing is not a behaviour that is fueled by seller greed, but is done to be fair to buyers. Where home ownership in the GTA is a fading dream for many young families, the affordability of Peterborough makes that dream possible. Buyers from the GTA and areas like Whitby, Oshawa and Clarington who are coming to Peterborough need time to identify available listings and to see them in daylight hours, and this delay gives them time to do so.
The demand for Peterborough homes is also fueled by transportation improvements including the 407. A January report published by the Canada Mortgage and Housing Corporation (CMHC) shows that real estate markets across Ontario are strong, and upward price movement is strongest in communities bordering on the GTA such as Hamilton, Barrie and Guelph. GTA prices were up 18 per cent at the end of the third quarter of 2016 compared to the same quarter in 2015.
The problem is, there is a shortage in supply both here and in the GTA which is driving up the prices and creating some frenzy in the marketplace. According to the Ontario Real Estate Association, the number of new listings in across the province fell by 12.4% in December 2016 compared to December of last year. By the end of the year, there were just 2.3 months of real estate listing inventory at the end of December 2016, down from 3.6 months from the same time one year ago. This figure represents the number of months it would take to sell current inventories at the current rate of sales activity. A poll they commissioned from Ipsos released in December confirms the reduced residential inventory; showing active residential listings are down 52.1 per cent from last November. Further proof of low inventories is the recent evidence of significantly reduced sales commission rates being offered by realtors in the GTA who help them compete for new listings.
According to Lycett, one of the reasons the residential inventory is so low is that once people move here, they never want to leave. The inventory shortage also deters homeowners who are ready to move from listing their property until they have secured their next destination. It’s a vicious circle where low supply discourages new listings.
For those who know where they are going next, now is a good time to list. Many homeowners wait until the spring for this move, believing their properties will show better and yield a higher price in warmer weather. Lycett believes that the good weather impact is more than offset by the inventory shortage which is exerting a powerful influence on this market.
The supply of local residential options is about to expand dramatically as the new Highlands Development project comes on stream. The developer has now established a website where interested buyers can register their interest, but no firm dates are provided, and calls for more information were not returned. KG
