The Mississauga real estate market is making history – and the good kind, too – throughout the coronavirus pandemic. Sales activity is soaring, prices are setting records, and the dollar-value of all transactions crossed an important threshold. And we are still in the early part of 2021.
Over the years, the Mississauga housing market has benefited from Toronto’s enormous growth. Like Vancouver and nearby regions, the impressive numbers in the Big Smoke have seeped into local areas, such as Mississauga, Oshawa and Barrie. Simply put, Toronto’s gains are also everybody’s gains. But unlike the 416 area, Mississauga’s condominium market is beginning to bounce back, with sales and valuations on an upward trajectory.
But what can explain the real estate boom in Mississauga? The same factors are contributing to the epic growth in the broader Canadian real estate market: strong demand, limited supply, historically low interest rates and evolving consumer trends. These have allowed the sixth-largest city in the Great White North to post an important number: $1 billion. What exactly does figure this represent? Let’s find out.
Home Sale Volumes Top $1 Billion in Mississauga Real Estate Market
According to the Mississauga Real Estate Board (MREB), the number of residential sales soared 48.6 per cent year-over-year in February, totalling 1,021 units. The last time Mississauga recorded this level of transactions was more than 15 years ago. In the first two months of 2021, home sales have jumped 47.1 per cent from the same time a year ago.
Housing prices, using the MLS® Home Price Index (HPI), which is considered more accurate than median and average calculations, have topped $1 million after climbing at an annualized rate of 14 per cent in February. Here are the benchmark prices for multiple property categories:
- Single-Family Homes: +16.3% to a little more than $1.252 million.
- Townhomes: +15.7% to $820,200.
- Apartments: +7.5% to $585,500.
The year-to-date average price, believed by industry observers to be more comprehensive, advanced 12.6 per cent to $952,900.
Overall, the dollar value of all home sales in February was $1 billion, a new record for the month of February and the largest dollar value of homes sold for any month in Mississauga’s history. This represents a 66.2-per-cent spike from last year.
Although new supply has entered the market, it is not nearly enough to satisfy demand. New listings jumped by a decade high 38.7 per cent to 1,337, while active residential listings edged up only 6.3 per cent. Also, months of inventory clocked in at 0.7 at the end of February, down from one last year and below the long-run average of 1.7 months.
“Home sales reached the second highest February ever, coming in just 23 sales shy of the February record from 2002. A more significant milestone was the fact that the total value of all those residential home sales topped $1 billion for the first time in the board’s history,” said Asha Singh, President of the Mississauga Real Estate Board. “There was a welcome influx of new supply entering the market in February but not enough to lift overall inventories. Competition among buyers continues to heat up, driving price gains and lifting the composite benchmark price above $1 million for the first time in history.”
Could the Mississauga Real Estate Market Ease?
In December, the RE/MAX outlook for Mississauga real estate anticipated another year of seller’s market conditions amid an increase of four per cent in average price, to $915,588. But could this exorbitant growth begin to level off in the coming months? There have been analyses suggesting that housing prices nationwide could begin to ease this year.
The federal government is beginning to tighten mortgage rules, reducing the amount of mortgage households can take on. Finance Minister Chrystia Freeland has indicated that she is watching regulators closely “to inform potential steps the government may take” on the Canadian real estate market. Industry experts say that something should be done to cool down the red-hot housing sector, but market analysts have different opinions on what can be done.
Christopher Alexander, Chief Strategy Officer and Executive Vice President at RE/MAX of Ontario-Atlantic Canada, and Elton Ash, Regional Executive Vice President at RE/MAX of Western Canada, say that governments need to be cautious with public policy instruments and taxes as “solutions” to Canada’s housing affordability crisis. They have suggested adding a mandatory financing condition to every offer, implementing an industry watchdog to review transactions where homes are sold well above asking price, and introducing more supply including opening up new areas that were previously off limits for residential development.
“The data does show that the cooling measures leveraged by the federal government in 2017 certainly offered short-term relief. But these measures failed to address the core problem of supply, particularly supply of affordable housing in Canada’s larger metropolitan markets. Without helping cultivate a much healthier balance between supply and demand, all other interventions by the government will be mere band-aid remedies.”
Many reports suggest that the Bank of Canada (BoC) raising interest rates could be effective in cooling off the sizzling housing market. But only time will tell if this happens, and if a 25-basis-point hike would be sufficient.
In the meantime, the Mississauga real estate market will continue to enjoy record-breaking numbers. Considering the typically busy spring market within this dynamic metropolis, real estate agents are in store for some eye-popping figures in the months ahead.