With Canada’s public health crisis at the 20-month mark, housing prices in Ontario continue to break records, month after month. Ontario MLS® home sales represented the third-best September in history. Across the province, home sales were 6.4% above the five-year average and 11.8% above the 10-year average for the month. Given September marks the start of another busy fall market, this wasn’t entirely surprising.
The sharp growth in sales numbers comes at a time when supply levels are plummeting to historic lows. According to the Canadian Real Estate Association, the number of new listings in Ontario fell 25.6% in September on a year-over-year basis. The 28,556 new residential listings that month marked the lowest September figure in more than a decade. Active listings were 48.1% below the five-year average and 59.9% below the 10-year average for September.
There was not an equal distribution in sales growth across the province as we entered the fall season. Smaller markets across Ontario experienced sharper increases in price growth; Ontario as a whole saw year-over-year price growth near 25% in September. Gains were notably lower in the GTA and Ottawa, average in markets like Oakville-Milton, Hamilton-Burlington and Guelph, and considerably higher in many smaller markets. Where on this scale did the Cambridge housing market sit? Let’s dive into the latest figures.
Trends in the Cambridge Real Estate Market
According to the Cambridge Association of REALTORS®, the local market experienced a similar trend as the rest of the province.
In total, 185 units were sold in Cambridge in September 2021. This is far below the number of sales logged in September of 2020, marking a 33% dip. Historically, the numbers are lower than a typical September. Home sales were 8.1% below the five-year average and 1.6% below the 10-year average for the month of September.
A reason for the drop in sales is a notable lack of inventory. “Home sales came in below-average levels for the month mainly due to the fact that there is a limited number of properties on the market,” said John Teixeira, President of the Cambridge Association of REALTORS®.
There were 249 new residential listings in September 2021, down 14.4% from September 2020. The number of new listings was the lowest number added in September in five years, sitting 11.5% below the five-year average and 12.7% below the 10-year average for September.
Low Inventory Creating a Seller’s Market
According to Teixeria, the rising cost of housing is here to stay until the supply changes. “Price gains look to be as strong as ever and price pressures don’t look like they will be easing until more listings start to hit the market.”
The MLS® Home Price Index composite benchmark price, a measure that tracks an area’s home price levels and trends, was $791,700 in September 2021. That’s up 31.7% compared to September 2020. That sharp increase translates to all property types with single-family home prices up sharply by 31.2%, townhouse/row units up 36.9%, and apartment prices rising 29.8% compared to a year ago.
Cambridge has become a home-buying hotspot among many looking to leave urban centres in favour of larger homes at relatively lower prices. The low inventory and soaring prices trend is nothing new, as Cambridge saw record growth in 2020.
An increase in supply is not out of the question. Earlier this year, new listings jumped up 134.6% year-over-year in April. This type of inventory increase is what will eventually ease the upward price pressure.
What’s Next in the Cambridge Housing Market?
According to the Canadian Real Estate Association, the trend toward lower inventory is not new, though COVID-19 has supercharged it. Many middle-aged millennials who now find themselves working from home are looking for properties outside large urban centres, lured by affordable prices and larger living spaces, both indoors and outdoors.
At the same time, many homeowners who may have explored selling their homes have hunkered down during the pandemic.
This increase in demand and shrinking supply has led to a record-breaking 2021 for the Cambridge housing market and may fuel a second-best year in 2022. With supply at record lows, the national average home price is forecast to rise by 5.6% in 2022.
Overall, smaller, amenity-rich cities such as Cambridge will likely remain a homebuyer’s hotspot.