Karen Graham
For most of us, our homes are our most significant asset, so we are keenly interested in its market value. This is the first in a series of quarterly reports on the current condition of the local real estate market to report on trends and drivers of supply and demand for property in our area.
The factors affecting the real estate market are many. Record low interest rates have been improving the viability of entering the market by making the buy versus rent comparison favour the purchase option. It is also driving home upgrades, so the entire residential market has been buoyed for some time and there is no evidence that rates will rise in the short term.
Another critical factor affecting real estate values is the job market, as the major financial commitment of a home purchase is affected by the consumers’ confidence in their employment situation. While Peterborough is on record as having one of the highest rates of unemployment in the province at 7.7% in July, this rate has fallen from the 2014 rate of 8.5%, and has done so during a time when our local labour force has expanded by 13.4%. In other words, local employment opportunities are growing. For our community, employment prospects are not restricted to the local community. One of the biggest drivers of real estate values is local infrastructure improvements, current and ongoing, that are making commuting to jobs outside the community more convenient.
One of the biggest drivers of the housing market is demographic- that slow, steady march of the changing, and that usually means the aging, of the local population. For example, in Tokyo there are currently over 8 million homes that are unoccupied, almost half of which are abandoned, neither for sale nor for rent. This is largely due to the relentless force of demographics as the population in that country continues to decline, taking with it the housing market. The current population level of 127 million is expected to fall by a million citizens a year for the next few decades, wiping out 20% of the population base, resulting in the possibility that ¼ of all Japanese houses will be empty in 20 years’ time.
Such is not the case for the Peterborough area, whose population is expected to grow not only due to increased local economic activity, but also due to the migration of residents to the area in response to rising home prices in the GTA coupled with improved commuting options.
Dominic Cole, Vice President and Broker of Record for Re/Max Eastern Realty
Dominic Cole preorts that in Peterborough/Kawartha area, sales are ahead of last year by almost 18 per cent. Photo: Supplied.
Inc. and current President of the Peterborough and the Kawartha’s Association of Realtors, reports that at the end of July, sales in the Peterborough/Kawartha area are trending 17.27% higher than last year. August numbers won’t be available for another two weeks. The highest volume of sale by price level is at the $200K to $250K level, followed by the $175K to $200K and then $250K to $300K. In addition to the favourable interest rate climate, he attributes the growth in sales to local factors including the airport expansion which is fuelling commercial flights, the 407 extension and the possibility of the resumption of the passenger train service between Peterborough and Toronto with the Shining Waters Railway project. He also said it hasn’t hurt that Peterborough has been identified by some real estate experts including MSN Money as one of the best places to buy real estate. The beauty of the area, the art and cultural community, the recreation opportunities as well as the affordability of the area are also reasons why he chose the Peterborough area as his home base after growing up in the UK and spending 18 years working in the city of London.
Re/Max Seales Representative Kathie Lycett of Bethany Real Estate. Photo: Supplied.
Locally, Re/Max Sales Representative Kathie Lycett of Bethany Real Estate has a wide variety of listings from vacant land, condos, farms, recreational properties and homes. In her office, Lycett is seeing an inventory shortage in the $300K range, which is pushing up prices in that segment and creating situations where competitive offers are the norm. She says “We have just come through a spring/summer season of high demand for properties in the $300 thousand dollar range. The buyers of these properties are, for the most part, coming from areas south looking for a piece of the rural lifestyle, but within an easy commuting distance to work in GTA”. The market is expected to remain strong in the near future.
