Cornwall Real Estate Market Experienced Double-Digit Price Growth

What goes up, must come down, right? After 16 months of meteoric growth across the Canadian real estate market, market analysts believe that the housing sector is starting to take a breather, finally. Whether it is the mortgage stress test or young homebuyers sitting on the sidelines ,waiting for a more affordable opportunity, there could be many factors that will contribute to cooling the Canada’s hot housing markets. Since the start of the coronavirus pandemic, buying patterns have evolved, with households craving more space to accommodate work and school, and more homebuyers willing to leave densely populated and high-priced urban centres. In response, they began flocking to small towns, scooping up the likes of Collingwood, Caledon and Cornwall real estate. But will this be the new normal in the post-pandemic economy? Many suggest that it might be too early to tell.

For now, industry experts are combing through the data to if the ultra-hot Cornwall real estate market will be able to sustain this momentum through the summer buying and selling season.

Double-Digit Price Growth in for the Cornwall Real Estate Market

According to the Cornwall and District Real Estate Board, residential sales advanced 16.8 per cent year-over-year in June to 188 units. This was a new sales record for the month of June. Year-to-date, home sales have increased at an annualized rate of 61 per cent to 1,000 units.

But how strong has demand been this year on a long-term trajectory? Housing transactions were 14.6 per cent above the five-year average, while they were also 19.6 per cent above the decade average for this time of the year.

Cornwall real estate prices have also posted massive gains to welcome the summer. The average price of homes sold in June rose 16.6 per cent year-over-year to $354,433. In the first six months of 2021, the average price of real estate transactions was $353,487, up 34.4 per cent from the same time last year.

And, of course, supply has been the most significant issue facing Cornwall’s housing sector.

The number of new listings spiked 43.4 per cent from June 202, with 238. New residential listings were 13.5 per cent above the five-year average. Active residential listings slumped 14.3 per cent to 215 units, which is the lowest figure on record in the month of June. Plus, active listings were 53.7 per cent below the five-year average.

Months of inventory, which gauges the number of months it would take to sell present stocks at the current rate of sales activity, came in at 1.1, down from 1.6 months the same time a year ago. This is also below the long-run average of 4.5 months.

“Home sales set yet another record, this time for the month of June. Sales activity has continued unabated at its breakneck pace for a year since surging to new heights last summer,” said Troy Vaillancourt, President of the Cornwall and District Real Estate Board, in a news release. “A strong increase in new supply coming onto the market has kept overall inventories from falling any further, but make no mistake, available supply levels are still trending close to rock bottom and the market balance remains deep in seller’s territory.”

And fresh supply is coming. According to the Canadian Mortgage and Housing Corporation (CMHC), housing starts climbed to 13 in June, up from zero at the same time in the previous year. In the first six months of the year, housing starts have totalled 153, up from 30 last year. With borrowing costs still historically low and the demand for housing in Cornwall remaining strong, it is more than likely that developers will continue to erect homes in the municipality.

That said, will the Cornwall real estate market begin to cool down? Cornwall’s unprecedented and monumental growth might have reached its zenith, much like the broader Canadian real estate market. Whether it will lead to additional easing or not remains to be seen in the second half of 2021.

Could Rural Ontario Real Estate Continue to Soar?

One of the beneficiaries of the Ontario real estate market throughout the COVID-19 public health crisis has been the province’s rural markets. From the small towns of Northern Ontario to the cottage countries of Eastern Ontario and the suburbs on the outer cusp of the Greater Toronto Area (GTA), so many regions – both rural and suburban – have witnessed exorbitant gains in sales activity and valuations.

That said, there has been speculation that these parts of the province could come back down to earth and return to their pre-pandemic numbers. Since many companies are pivoting back to in-person operations, some employees will be re-introduced to the daily office commute. This also means that many professionals may need to leave the joys of small town living behind and move back to condominiums in Toronto, Ottawa, Vancouver, and Montreal where employment opportunities abound.

However, the extent of the migration back to urban centres is hard to predict, as a vast number of businesses are choosing to maintain remote work environments for the foreseeable future. For the summer buying and selling season at least, the Cornwall housing market and its surrounding areas can expect to see continued growth.

Sources

CREA
CMHC