Mild winter heats up home sales
Highrise condos now viable in Fort Erie and Port Colborne, says broker
Niagara real estate was predicted to experience a flat start to the year, with activity picking up in the last six months.
But pent-up demand and an unseasonably warm winter has buyers and sellers back in the market earlier than anticipated, resulting in a spike to the region’s year-end forecast.
Royal LePage Real Estate Services released its house price survey Friday, projecting the aggregate price of a home in Canada will increase nine per cent — up from five per cent — by the fourth quarter of 2024.
The report said buyers appear motivated to get ahead of rising home prices, rather than waiting for mortgage rates to fall, leading to a stronger-than-expected first quarter.
Brad Johnstone, broker of record for Royal LePage NRC Realty, is predicting a seven to nine per cent increase in Niagara by the final quarter of the year. And after a soft 2023, “any increase is a welcome increase.”
“When I’m talking to my realtors across Niagara, we’re getting anywhere from 10 to 70 groups of people into an open house, so even just the feel of the buyers; they’re out looking,” said Johnstone.
“I would say between now and June is that sweet spot, if you will, and then after that, I expect things are going to be strong, single-digit increases for the rest of the year.”
In the first quarter, the aggregate price of a home in Niagara increased 1.8 per cent compared to the previous year, to $628,900. On a quarterly basis, Royal LePage said the price remained steady, up by 0.3 per cent.
Sales activity and inventory has been slowly building in the past few weeks, as has consumer confidence with interest rates expected to fall later this summer. Johnstone said he is seeing a steady rise of multiple offers, with average days on market decreasing for homes priced at market value.
But even when interest rates decrease — which will inevitably result in the market picking up — the day of two per cent rates “probably aren’t coming back any time soon,” Johnstone said.
“Buy now, take a variable rate mortgage and ride the rates down,” said Johnstone, adding the average mortgage rate over the past 25 years is 5.2 per cent.
“You’re going to take advantage of the better prices right now because we’re just starting to see pricing starting to increase.”
Broken down by housing type, the median price of a singlefamily detached home in Niagara increased 1.9 per cent yearover-year to $658,200 in the first quarter. The median price of a condominium increased 2.3 per cent to $386,100 during the same period.
Highrise condominiums are typically built in larger markets where land and prices are expensive and developers can better fill those spaces but in recent years, that has changed, with Niagara seeing numerous condo projects coming to market.
“We’re definitely going to see more condos, we’re definitely going to see them fill that gap for affordability,” said Johnstone.
“For a builder, they’ve got to plan two to five years out (so) when they see the market picking up … they do their best to ramp up products as well and get them to market because they want to take advantage.”
In the next three to five years, Johnstone expects to see condos in every market in Niagara, including Port Colborne and Fort Erie, where “previously the average sale price didn’t support building a condo … but now it does.”
Johnstone likes where Niagara is sitting within the market. Over the past few years, the region outpaced the rest of Canada in growth, leading to a sentiment it was no longer affordable, but then it retracted “more quickly,” he said.
“I like to see five to 10 per cent, or five to eight per cent, increases because they’re more manageable. These great big increases come with corrections, so for us, we like to see nice, strong single digit increases and it’s nice for everybody,” he said.