Impact of rising house prices felt all over
High demand, limited stock benefits sellers but puts squeeze on renters
Terri Mccallum and Catherine Livingston are both watching Niagara’s real estate market, but for different reasons.
Home resale prices shot up 15 per cent last year, and 22 per cent over the past four years, due in part to a shortage of available housing. A typical house in Niagara now sells for $476,300.
“I sound like a broken record, but it’s all supply and demand,” said Mccallum, president of the Niagara Association of Realtors.
She said it wasn’t uncommon last year for a listing to have eight to 10 different bidders.
“Honestly, last week there was a house that had 20 offers,” she said. “A couple of days ago there was one that had 37 offers, but that was an anomaly — it’s a huge double lot in Niagara Falls” and the house needs work.
With interest rates in the two per cent range, and more and more Toronto buyers eyeing the comparatively cheaper Niagara market, she can’t guess when the surge will recede.
A shortage of available housing has Livingston’s attention, too, but for different reasons.
She is a program manager at Community Care of St. Catharines and Thorold, and said high home resale prices have driven rental costs through the roof. With fewer owners willing to rent, rental prices have gone up and landlords are more selective about who they rent to.
“They don’t want anyone who is on assistance. They’re asking for things that people can’t provide,” Livingston said.
“A lot of people are struggling with their credit rating right now, a lot of people don’t have the means to put (first and) last months’ rent together.”
Between 2017 and 2019, average home resale prices climbed slowly each year by less than five per cent. Last year, though, Niagara’s benchmark price — the average for a home 51 to 99 years old, two bathrooms and three bedrooms — jumped 15 per cent (even as average Ontario wages grew by only about 2.7 per cent).
The average home that sold for $414,700 in 2019 went for $476,300 in 2020, according to the Niagara Association of Realtors annual report.
Last year 8,157 homes were sold — about 1,000 more than during 2019 — yet about 1,000 fewer were listed for sale. Last year homes took an average 36 days to sell; it was 44 days in 2019.
“People from Toronto are moving from Hamilton, from
Hamilton to Stoney Creek, Beamsville, St. Catharines … now all the way to Fort Erie and Welland,” said Mccallum.
Recently, she said, one Niagara home listed at $329,000 sold for $430,000.
First-time buyers are taking advantage of low interest rates, and in some cases borrowing from their savings or from parents to get into the market. With the influx of out-of-town buyers, that makes for a crowded market.
Mccallum has sympathy for people trying to get into the market, and for people shut out of affordable housing because of it.
“I don’t know if it will keep going, but I can’t see it stopping any time soon,” she said.
Livingston, who has worked at Community Care for 18 years, remembers the days not long ago when it wasn’t all that hard to help a person find a home.
The agency offers a service helping connect people in need with landlords that have properties to rent. The list of landlords has grown smaller in recent years. She noticed the shrinking rental market around 2012, when Community Care saw an increase in older, single women who had never asked for its help before.
“That’s when I really started to take note of when things started to get tight and things started to get expensive,” she said, adding the last two years “the rents have been off the charts.”
Livingston said a person receiving disability assistance gets a base amount of $1,169 monthly. Even if someone finds a place for $900 or $1,000 a month, she said, “how are you living?”
“I have a client who said to me, she’s going to start saving $100 a month because she wants to move. And she’s a single parent,” Livingston said.
“She’s saving, she thinks she can move in two years. She’ll have enough saved. That’s the kind of thing we’re seeing here.”