Oshawa, Brock Township affordable options as housing prices stall
Published August 4, 2022 at 12:58 pm
The City of Oshawa continues to be both a real estate bargain compared to its GTA cousins, as well as a busy place for transactions as real estate professionals prepare for a downward pricing trend in the housing market.
The total number of sales across the Toronto Real Estate Board’s coverage area was down 47 per cent year-to-year in July and new listings also declined, albeit down by a more moderate four per cent, as sellers digest news that housing prices will drop as much as 23 per cent by the dawn of 2023.
Much of the price cuts will be absorbed by the sale of high-end homes, perhaps an indicator why home sales in Oshawa – 700 in July and 1,989 year-to-date – have been one of the busiest in the GTA.
The expectation is that the trend for new listings will continue to follow the trend for sales, as we move through the second half of 2022 and into 2023. Market conditions remained much more balanced in July 2022 compared to a year earlier. As buyers continued to benefit from more choice, the annual rate of price growth has moderated.
The MLS Home Price Index Composite Benchmark was up by 12.9 per cent year-over-year while the average selling price was up by just 1.2 per cent compared to July 2021 to $1,074,754. Less expensive home types, including condo apartments, experienced stronger rates of price growth as more buyers turned to these segments to help mitigate the impact of higher borrowing costs.
“The Greater Toronto Area population continues to grow, and tight labour market conditions will drive this growth moving forward. Despite more balanced market conditions resulting from rapidly increasing mortgage rates, policymakers must continue to take action to boost housing supply to account for long-term population growth,” said TRREB Chief Market Analyst Jason Mercer.
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“TRREB has put realistic solutions on the table to address the existing housing affordability challenges. With savings high and the unemployment rate still low, home buyers will eventually account for higher borrowing costs. When they do, we want to have an adequate pipeline of supply in place or market conditions will tighten up again.”
Durham Region remains a relatively affordable option for home sales, with an average selling price in July of $901,412, the lowest number by region by a considerable margin. Within Durham, the ‘bargains’ are available only in certain areas, though only Uxbridge ($1.173 million), Pickering ($1.051 million) and Whitby ($1.007 million) remained above the $1 million selling threshold.
Brock ($717,000) and Oshawa ($765,000) each fell to under $800,000.
Year-to-date housing prices in Durham ranged from $1.4 million in Uxbridge to $936,682 in Oshawa, evidence that cuts in house prices has already begun.
TRREB, which would prefer stable rather than declining home selling prices, is calling on all levels of government to reassess and clarify policies related to mortgage lending and housing development.
“Many GTA households intend on purchasing a home in the future, but there is currently uncertainty about where the market is headed. Policymakers could help allay some of this uncertainty. As higher borrowing costs impact housing markets, TRREB maintains that the OSFI mortgage stress test should be reviewed in the current environment,” said CEO John DiMichele.
“With significant increases to lending rates in a short period, there has been a shift in consumer sentiment, not market fundamentals. The federal government has a responsibility to not only maintain confidence in the financial system, but to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs,” added TRREB President Kevin Crigger. “Longer mortgage amortization periods of up to 40 years on renewals and switches should be explored.”
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