Durham housing market to shift into balance in 2021, prices expected to rise 3%
The Durham housing market will likely see a shift from the current seller’s market into more balanced territory in 2021. The trend diverges from many other Ontario housing markets, which are expected to sit in strong seller’s market territory next year, which is characterized by low inventory and rising demand. Despite the pending balance, average selling price of Durham Region homes increased to $696,351 in 2020 (Jan. 1 – Oct. 31), up from $611,342 in 2019 (Jan. 1 – Dec. 31). The RE/MAX outlook for Durham residential real estate in 2021 is an increase in average price of 3%, to approximately $717,241 across all property types.
Demand in the Durham housing market is currently outpacing supply, which has had an impact on average home prices across the region. There are currently 1.1 months of supply available. Days on the market in 2021 are anticipated to increase, if inventory grows as expected.
An influx of buyers from outside Durham was a prominent trend in the region in 2020, with buyers seeking larger homes and more green space. This has been common across many Canadian housing markets as well as regions abroad in the wake of COVID-19, with home-buying preferences shifting in favour of more space, less density and lower prices.
Move-up buyers are currently driving the Durham market, and are projected to continue doing so in 2021. These buyers are typically looking for two-storey detached homes or townhomes, based on their affordability, lower land transfer tax, and added space in relation to condominium properties.
Durham’s first-time homebuyers are most commonly young couples whose average price to enter the market is around $600,000. The demand for luxury properties has stayed the same since the start of 2020 and is expected to remain the same in 2020.
The most in-demand neighbourhoods in Durham are Oshawa, Clarington and Whitby, based on sales in 2020. These neighbourhoods are also expected to remain in highest demand in 2021.
An expected influx of immigration, continued work-from-home mandates, and the growing infrastructure of the region are expected to be some of the most prominent factors impacting average sale price in 2021.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
52% of Canadians believe real estate will remain one of the best investment options in 2021
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”
The Durham housing market came to a near halt at the end of March in the wake of COVID-19 lockdown restrictions. However according to the RE/MAX Fall Market Outlook Report, by mid-May RE/MAX agents found sellers coming back to this market, which caused an overall increase in activity that has continued to climb. The lack of supply and increased demand has meant that average home prices have continued to climb, which is expected to continue.
Rural areas and cottage properties have seen an increase in buyer interest, as working from home continues to be an option for many. It’s expected that the Durham housing market should continue to see a healthy amount of interest and activity over the next 12 months, due to its larger homes and properties in relation to nearby Toronto, coupled with a growing university, new malls and the Hwy. 407 expansion.
Based on these factors, the Durham housing market is expected to see a 14% increase in average residential prices for the remainder of the year.
Ontario Real Estate Trends
What’s been happening across other Ontario real estate markets? With the province being one of the hardest-hit regions in Canada, markets such as Niagara, Mississauga and Kitchener-Waterloo experienced significant drops in activity. However, come June, they bounced back aggressively as economies began to reopen. With all of Ontario now in phase three of re-opening and consumers more comfortable engaging in the market, market activity in Ontario is expected to remain steady in the fall, with modest price increases of up to 6% in some regions.
Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.
The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.
Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
Canadians equally split on their confidence in the housing market
Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell.
“The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”
Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:
48% of Canadians would like to live closer to green spaces
48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
33% of Canadians would like more square footage in their home and have realized they need more space
44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)
About the 2020 RE/MAX Fall Market Outlook Report
The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments.
Balanced market to prevail in 2020, prices to rise 3%
The RE/MAX Durham housing market outlook for 2020 continues to be balanced, following in line with the market conditions of 2019. The average residential sale price expectation for Durham Region in 2020 is an increase of three per cent, due to a healthy and steady market. Sales prices will continue to increase at a reasonable rate as long as inventory continues to be available in 2020.
Affordability is a concern to those looking to enter the Durham housing market. It is anticipated that affordability will deteriorate further in 2020 as the population continues to grow and more buyers move east to Durham from Toronto. The mortgage stress test prompted more Toronto buyers into the Durham region, which helped level out the loss of first-time buyers who were unable to enter the market in Durham in 2019. First-time homebuyers are expected to be the main market driver in 2020. Communities in high demand will be Bowmanville and Newcastle.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.
Most individual markets surveyed across Canada experienced moderate price increases year-over-year from 2018 to 2019. However, some regions in Ontario continue to experience higher-than-normal gains, including London (+10.7 per cent), Windsor (+11 per cent), Ottawa (+11.7 per cent) and Niagara (+12.9 per cent).
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”
Lydia McNutt is an award-winning editor, with more than two decades of experience specializing in Canadian real estate. At RE/MAX, Lydia is responsible for developing consumer-facing content while promoting the RE/MAX brand through housing market reports and market news, as featured on the RE/MAX Canada blog and social media channels. Lydia has been published nationally on topics ranging from real estate, architecture, decor and design, to finance, business, technology, entertainment and lifestyle. When she’s not head-down at her writing desk, Lydia is busy “momming” in Oakville, Ontario, where she lives with her husband, two kids and their chocolate lab, Betty. Email Lydia at firstname.lastname@example.org