Sudbury housing market to favour sellers in 2021, prices expected to rise 5%
The Greater Sudbury housing market is in store for another seller’s market in 2021, thanks to continuing challenges in housing supply and rising prices. Low inventory has been a common trend across many Ontario housing markets, putting upward pressure on prices. Indeed, single-detached homes in Sudbury saw prices rise to $335,247 in 2020 (Jan. 1-Oct. 31) compared to 2019 (Jan. 1-Dec. 31). During the same period, the average price of condominium properties in the region increased to $288,634. Low supply and rising prices are expected to be a continuing factor in 2021 market activity. Thus, the RE/MAX outlook for Greater Sudbury real estate is an increase of 5% in average price to $327,537 across all property types, while sales expected to remain on par with 2020 levels.
Housing inventory currently sits at one month. This shortage that resulted in seller’s market conditions in 2020 is expected to persist in 2021, with no forecasted boost in housing supply coming on stream.
Who’s driving the Sudbury housing market?
Demand from first-time homebuyers has increased in 2020 thanks to historically low interest rates and a healthy local economy. This buyer type – typically young couples in search of single-detached homes in the $200,000-$300,000 price range – is expected to be the primary driver of market activity in 2021.
Move-up buyers are also expected to move the needle in local market activity next year, continuing the 2020 trend of larger homes with more outdoor space in Greater Sudbury’s outlying areas. This has been a common trend across many Canadian housing markets as well as regions abroad, as homebuyers seek more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.
Move-over buyers from southern Ontario are expected to continue migrating to the region in small but steady numbers. Young buyers who previously left the area are opting to move, thanks to their ability to work remotely and Sudbury, among other Northern Ontario markets, offering greater value for their dollar.
The move-up property segment is being driven by families who are facing the obstacle of low listing inventory and multiple-offer scenarios. This has resulted in growing frustration among move-up buyers, with no relief in sight in 2021.
Sudbury’s hottest neighbourhoods
The three neighbourhoods in highest demand are Sudbury’s South End, North End and Valley East, registering the highest number of sales in 2020. In terms of popular properties, single-detached houses across Greater Sudbury’s outlying areas with ample outdoor space will continue to be the hottest sellers.
Sudbury new-home construction
On the new-construction front, housing starts were down in Greater Sudbury over 2019 and new-home inventory falling short of demand, much like the resale sector. The building industry did not anticipate such high demand. The shortage, coupled with a substantial COVID-induced increase in construction materials, is expected to put upward pressure on new-home prices.
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:
Additional report findings include:
- 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.”