January 2019 market conditions in the Western Region of Southern Georgian Bay reflected the more moderate and balanced pace experienced throughout the last portion of 2018 compared to what Buyers and Sellers had experienced over the past few years. Looking back, the Fair Housing Plan was introduced by the Ontario government in April of 2017 to quiet the market frenzy that began in 2016. New mortgage rules were introduced in 2018 that required all Canadian home buyers to undergo a mortgage stress test, even with a down payment of 20% or more. These measures were intended to cool overheated markets and curb risky lending. Many Buyers have been faced with difficulties qualifying for loans under the stress test that ensures Buyers could still afford their mortgage if interest rates were two percentage points higher than the rate they negotiated with their bank.
It’s not surprising that with interest rate hikes implemented in 2018 along with government measures and ongoing supply issues that the number of sales in the Western Region of Southern Georgian Bay in January 2019 were down 16.5% from one year ago.
With the ongoing scarcity of listings and continued demand driving prices upward, the average sale price in the Western Region reported a 29.7% increase from last January, reflecting similar activity reported across the region where the average sale price was up in all areas except Meaford, which reported a modest decline of 3.3%.
New listings were up 13% year over year and even though active listings were up 29.8% to 471 in January 2019, inventory remained at near historic lows.
The Sales-to-New-Listings Ratio indicates the ratio between the number of homes sold and the number of new listings entering the market. With the Sales-to-New-Listings Ratio down from 60.9% last January to 45%, the Western Region is clearly heading out of a long-running Seller’s market into a balanced market. A higher ratio implies a Seller’s market, while a lower ratio implies a Buyer’s market.
With interest rates unlikely to climb significantly in 2019, affordable housing options and strong demand for the vibrant lifestyle offered in the area, the Western Region is poised to perform well throughout the coming year.