Before the coronavirus pandemic, the Northern Ontario housing industry was about as quiet as your typical town in this part of the province. Fast forward to the present, and this region in Ontario has been smoking hot this last year, garnering the attention of buyers near and far. The North Bay real estate market has enjoyed incredible growth in terms of sales activity and housing valuation, driven considerably by out-of-town buyers ditching urban life for something a bit quieter.
But as the post-pandemic economy normalizes and offices welcome back employees with (socially distanced) arms, can North Bay sustain this momentum and expansion? So far, demand seems to have subsided, but what is happening to prices?
According to the North Bay Real Estate Board (NBREB), residential property sales tumbled at an annualized rate of 9.4 per cent in October, totalling 115 units. Despite this decline in housing transactions, this was still one of the best performances recorded for the month of October.
Year-to-date, North Bay real estate sales advanced 13.9 per cent compared to the same time a year ago, posting a record 1,368 units. However, home sales were 0.3 per cent below the five-year average for this time of the year.
Although sales activity may be levelling off, home prices continue to accelerate. The MLS® Home Price Index (HPI)–which is considered to be a more accurate reflection than average or median price measurements–soared 35.2 per cent to $355,700 for a single-family property.
When it comes to the average price of homes sold in October, residential properties climbed at an annualized rate of 44.8 per cent to an all-time high of $453,711. Overall, the year-to-date average price jumped 31.1 per cent to $393,351.
Supply is still a critical issue in Northern Ontario. According to the real estate association’s data, the number of new listings fell sharply by 10 per cent, while active residential listings plummeted 40.6 per cent to just 85 units.
On a historical basis, new listings were 7.4 per cent below the five-year average, and active listings were 69.3 per cent below the five-year average.
Months of inventory sat at 0.7 at the end of October. This is down from 1.1 months at the end of October of last year, and it is well below the long-run average of 4.7 months. This is an important measure for the Canadian real estate industry because it represents the number of months it would take to exhaust current inventory at the present rate of sales.
However, new housing construction is booming in the North Bay real estate market. According to Canada Mortgage and Housing Corporation (CMHC), housing starts totalled 29 in September, up from just seven at the same time a year ago. In the first nine months of 2021, housing starts have inched toward 200, up from 52 during the same period last year.
North Bay Economy Under Development
At the height of the COVID-19 public health crisis, industry experts debated if North Bay and its neighbours would take advantage of rising interest in the region, or if it might slip through their fingers. After all, an eventual normalization of the economy could prompt some households to return to the glitz and glamour of major urban centres.
But North Bay is not wasting this opportunity. Instead, the municipality has agreed to support economic and residential development to retain recent newcomers and attract more young families looking to plant roots somewhere other than Toronto or Ottawa.
Earlier this year, the Ontario Real Estate Association (OREA) published a report titled Small Towns, Big Opportunities: Unlocking Growth in Ontario’s Rural and Northern Communities. It identified strategies that could be employed to encourage people to move north. OREA stated rural high-speed Internet, job creation and natural gas expansion as some of the key factors and mechanisms that would encourage further migration to this area.
“For too long, rural and Northern Ontario have lost too many jobs and too much talent. One-size-fits-all government policies often accelerate the trend, robbing these communities of a brighter future,” Tim Hudak, OREA’s CEO, said in the release. “But together, we can turn this around. A government of Ontario focused on these ideas will help create and attract jobs, reverse the out-migration of young talent, close the infrastructure gap, and foster more housing starts.”
North Bay is one of the many beautiful towns located in the northern reaches of Canada’s most populous province, but many argue that it currently lacks the infrastructure to support a population boom. As more young professionals and families pack up their urban lifestyles in favour of quieter, more remote regions, this could be the time to shine for the North Bay real estate market.
Whether you desire a change of scenery or want to realize the dream of housing affordability once again, North Bay may offer the opportunity you’re looking for!