Real Estate Outlook 2014 (Residential)– Centre Wellington ,Ontario by George Mochrie Over the past few weeks , everywhere you turn there has been commentary on the real estate market in Canada.And while this information has been interesting and informative , it necessary doesn’t reflect what is happening in your own back yard . There are certainly still hotspots throughout Canada – including large urban areas like Toronto and Vancouver … and of course Alberta and Saskatchewan – but the statistics being thrown around as general fact are heavily skewed by these areas . In this article , I focus on Centre Wellington , Ontario – comprised of the smaller urban areas of Fergus & Elora and surrounding rural areas – estimated population 25,000. In the next decade , this area is poised to experience above average growth due to its proximity to the GTA and availability of development lands that have been acquired by larger developers and home builders that had previously been concentrating more in Guelph and other urban areas. However , as those areas have become more built out , eyes have turned to this area as a desirable community for developers and homebuilders alike. By 2030 , it is expected that population in this area will exceed 40,000. In 2013 , resale activity increased 20% over 2012 levels – and average sale prices increased 3 % to $ 352,671. However , even within the year , certain trends were developing on a local level . For example, demand for homes under $ 400,000 outstripped supply – while there was actually some buyer price resistance over $ 500,000 as the year progressed. Prices were actually trending 5% above 2012 levels heading into August 2013 , however , there was a “cooling off” of upward price pressure in the last quarter of the year. Sales and new availability of lower priced condos also impacted overall average price statistics. While local pricing remained mainly stable – and did not see the year over year gains you constantly hear about in certain urban markets – the local real estate market remained a “sellers” market as 2013 ended – largely due to a lack of inventory vs availability of buyers looking for suitable properties. As we now enter the last half of January 2014 , new listing activity has been lethargic even by January standards , while buyer activity – measured by requests for viewings , incoming phone inquiries , etc. - has remained very strong. This strongly suggests it will remain a “sellers market” here in Centre Wellington in 2014 . I anticipate new house building will gain momentum in the later half of 2014 , which will have an overall impact on the local real estate market moving forward . Demand for homes under $ 400,000 continues to outstrip supply , and this will actually lead to higher price gains vs the overall local market in this price category in 2014. We are starting to see significantly more out of town buyer inquiries, as many see Centre Wellington as a buying opportunity and see value for money vs other markets including Guelph. Higher unemployment and loss of jobs in the region has had somewhat of an effect on the real estate market from a pricing perspective , however , economically our area remains stable due to its diversity – and demand for real estate in this area will remain strong despite outside “macro” economic factors. In fact , I forecast that resale activity will set an all–time high in 2014 in Centre Wellington – based on the assumption that listings will increase to an all time high as well by July 2014. I believe the slow start to new listing activity in 2014 has been largely weather related – and we will start to see above average listing activity by April 2014. I project year over year price gains will remain in the + 3% range in 2014. My projections are based on a number of assumptions , including interest rates will remain stable , and bank lending policies do not become more restrictive as we move further into 2014. Lack of new listing activity will also impact projections – and more importantly , this lack of activity will foreshadow larger underlying local negative economic trends moving forward. George Mochrie 519-766-3716 gmochrie@edgerealtysolutions *** This article is produced by George Mochrie – and does not necessarily reflect the opinion of Edge Realty Solutions or any local real estate board.
Posted on: Thu, 16 Jan 2014 20:24:56 +0000
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