Are the days of homebuyers congregating in uber-populated urban centres like Toronto, Brampton, Mississauga and the rest of the Greater Toronto Area gone for good? The global pandemic our world is currently on the brink of emerging from has had a ripple effect upon societies worldwide, and has greatly impacted the Ontario real estate climate.
It has become the expectation over the past few decades that Ontario real estate prices will inflate year-over-year in mega-cities such as the GTA and Ottawa. There are also trends which can be expected to come in waves as the market transitions from a buyer’s market to a seller’s market. However, this past year has changed many Canadian housing markets in many unexpected ways. According to the Canadian Real Estate Association (CREA), from December 2020 to January 2021, the number of newly listed properties dropped by 13.3%. Despite this statistic, “National home sales rose 2% on a month-over-month (m-o-m) basis in January.” CREA’s latest data shows new listings rebounded by 15.7% from January to February 2021, but home sales recorded over Canadian MLS climbed 6.6% in that time, setting a new all-time record. These statistics further strengthen the indication of a high-demand, low-supply real estate market.
In contrast to the larger urban centres across Canada, smaller cities and towns have seen stability across Ontario real estate markets in recent history; that is, until the last 12 months redefined all our assumptions about non-urban markets in Canada. Small, rural communities across Ontario are now experiencing the effects of the global pandemic on the market, undergoing unprecedented growth over such a short period of time. With many people no longer constrained by their commute to the office, the option to move to a smaller city or town is becoming more appealing. This influx of residents, however, has caused a spike in housing costs in these traditionally less expensive markets.
Ontario’s Blue Coast
The County of Lambton is a small, rural community in south-western Ontario. The main city in the area, Sarnia, sits on the shores of both Lake Huron and the St. Clair River – leading to the area being known as “Ontario’s Blue Coast.”
Not an overly populated area, with a total population of 130,000 residents in its 3,000 km2 land mass (the majority of which is in Sarnia), Sarnia-Lambton is known as a quiet oasis away from the fast-paced city life experienced in surrounding cities like Windsor and London.
With the primary industry in the Lambton Country being petrochemical, plenty of young families and trades professionals have relocated to the Sarnia-Lambton area in the last decade to work at the region’s chemical plants, helping to fuel population growth.
The Rapidly Changing Sarnia-Lambton Real Estate Market
As 2021 began, Sarnia-Lambton experienced a steep decline in homes sold, a trend that was not a result of lagging demand, but rather insufficient supply. The MLS System of Sarnia-Lambton Real Estate Board reported a decrease of 18.8% of total units sold when comparing January 2021 to January 2020. This decrease in supply has contributed to soaring housing prices, with the average price rising by a staggering 25.1% from January 2020 to January 2021.
As per CREA, “Home sales pulled back in January as available supply continued to dwindle and not enough new listings came online to meet the current level of demand,” said Rob Longo, President of the Sarnia-Lambton Real Estate Board. “Despite the lowest January reading for home sales in seven years, the total dollar value of all those sales still managed to hit a new record for the month. With inventories at record lows and some of the tightest market conditions ever it’s no surprise that price growth remains well inside double-digit territory.”
To further add to the low availability of houses on the market in Sarnia-Lambton, the number of residential listings hit a historically low point for the month of January this year. In fact, 24.8% fewer residential listings were posted on the market in January 2021 compared to that at the same time in 2020. Without a sudden infusion of inventory into this local market, the current numbers indicate that housing prices are only going to be increasing in the area for the foreseeable future.
What Can be Expected for the Blue Coast in the Future?
It is no question that Sarnia-Lambton is sitting comfortably in a seller’s market. While this may not be ideal for current residents hoping to upgrade in the area, it is appealing to those looking to get away from the GTA, Windsor, London or other densely populated areas with high real estate price tags.
Given the sustained levels of demand in the Canadian and Ontario real estate markets, coupled with low interest rates, it is projected that the market in Sarnia-Lambton will continue to remain on the rise. It is expected that the Blue Coast will become even more appealing to buyers due to its vast natural landscape and proximity to both Lake Huron and the St. Clair River as we head into the traditionally more heated real estate activity of the spring and summer months.