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 priceto $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.
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:
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.”
Once COVID-19 lockdowns began in March, the Sudbury housing market experienced a decrease in new buyers; only those who were already in the process of a transaction remained active. By the second week of April, activity started to resume but listing inventory remained low, cAccording to the RE/MAX Fall Market Outlook Report, resulting in multiple offer situations at almost all price points. These seller’s market conditions have continued into the summer months and are expected to continue through the fall market.
Consumer confidence remains high and the Sudbury housing market is seeing an increase in buyer interest overall. The luxury real estate market is moving faster than it has in previous years, but like single-detached homes priced below $650,000, there is little inventory in the luxury segment. Waterfront homes from $900,000 and above are also seeing multiple offers.
Based on these factors, a 10% increase in the average residential sale price is expected in the Sudbury housing market for the remainder of 2020.
Ontario Real Estate Trends
What’s been happening across other Ontario real estate markets? With the province being one of the hardest-hit regions in Canada, markets such as Niagara, Mississauga and Kitchener-Waterloo experienced significant drops in activity. However, come June, they bounced back aggressively as economies began to reopen. With all of Ontario now in phase three of re-opening and consumers more comfortable engaging in the market, market activity in Ontario is expected to remain steady in the fall, with modest price increases of up to 6% in some regions.
Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.
The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.
Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
Canadians equally split on their confidence in the housing market
Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell.
“The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”
Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:
48% of Canadians would like to live closer to green spaces
48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
33% of Canadians would like more square footage in their home and have realized they need more space
44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)
About the 2020 RE/MAX Fall Market Outlook Report
The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments.
Seller’s market conditions expected, prices to rise 2%
The Sudbury housing market will favour home sellers in 2020, mirroring conditions that characterized 2019 housing market activity as well. RE/MAX is attributing this trend to the current shortage in listings, which is expected to continue. Sales will see a slight increase over the next 12 months, as Sudbury remains a steady market, with average residential sale price expected to rise by two per cent.
Housing affordability in the region continues to attract younger homebuyers in search of affordably priced detached properties. The new year will also see continued high demand for townhome condos, which are being designed for and purchased by empty nesters.
The top neighbourhoods to watch in in 2020 Sudbury for sales include the city’s north end and New Sudbury. First-time buyers and move-over buyers drove demand in 2019 and will continue to propel the market in 2020 as well.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.
Most individual markets surveyed across Canada experienced moderate price increases year-over-year from 2018 to 2019. However, some regions in Ontario continue to experience higher-than-normal gains, including London (+10.7 per cent), Windsor (+11 per cent), Ottawa (+11.7 per cent) and Niagara (+12.9 per cent).
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”
Public Relations & Content Manager | RE/MAX Canada
Lydia McNutt is an award-winning writer, editor and public relations professional, with a focus on all things real estate. At RE/MAX Canada, Lydia translates market data and trends into educational and entertaining content for homebuyers and sellers, while furthering the RE/MAX brand reach, nationally and globally. Explore timely news articles, market trend reports and thought-leadership on blog.remax.ca. Lydia has been published nationally on topics ranging from real estate to architecture, design and decor, finance, business, technology, entertainment and lifestyle topics. Email Lydia at firstname.lastname@example.org