It’s no secret that the housing market has been booming since the early days of the pandemic, but just how crazy is it? The Toronto Regional Real Estate Board (TRREB) recorded home sales at the second-highest level on record for October 2021. Inventory remains at an all-time low, with new listings down almost one-third compared to October 2020.

In the Hamilton-Burlington residential area, single-family detached properties are the most competitive, with an average price reaching a new record of $1,000,000. Townhouses had an eight percent increase in sales compared to September 2021, yet overall, sales began to dip slightly after the summer months.

“In line with seasonal trends, July and August tend to have fewer new listings and sales, which is exactly the case here,” says Realtors’ Association of Hamilton-Burlington (RAHB) President Donna Bacher. “Even though we have fewer active listings and sales, we are also seeing a slight dip in the average sale price. Overall, the same story continues, and that is that the level of inventory remains at critically low levels. We definitely need more supply on the market.”

Current Hamilton MLS® stats indicate an average house price of $877,800 as of October 2021.

Despite the slight drop in sales prices, there is still an urgent need for affordable housing solutions, and experts agree the government needs to step in.

“The only sustainable way to address housing affordability in the GTA is to deal with the persistent mismatch between demand and supply. Demand isn’t going away. And that’s why all three levels of government need to focus on supply. The federal government has stated that collaboration with provinces and municipalities is required. This collaboration could be spearheaded, at least in part, with housing-related incentives tied to federal infrastructure investment,” said TRREB President Kevin Crigger.

So, if demand is so high, it begs the question – why is inventory so low?

For one thing, housing development slowed considerably during the pandemic, with some builds just starting to pick back up again. And while builders may now have the green light, soaring lumber prices have made construction more costly and complex. The supply chain has been backed up for almost two years which results in even more delays. Existing plans have either been scrapped altogether or require builders to accept losses, neither a favourable option. In many cases, projects have been put on hold until corporations assess the pandemic’s overall impact on the construction sector.

Outside of Toronto, many suburbs have seen changes in zoning to protect the Green Belt. While this is a positive for protecting the environment and green space, much of the current zoning is outdated and requires a new strategy to consider the growing population while protecting vulnerable areas.

In addition, many homebuyers who at one time could list their home knowing they’d find something quickly once it sold are now afraid that low inventory means not finding a property in the area they want or at a price they can afford. Bidding wars also turn many homebuyers off. The high stress of multiple bids and a highly competitive market create a better argument for staying put and upgrading the current home instead.

Wherever you sat on the spectrum this year, it was undoubtedly an exciting market to watch.

By: Julie Achtermeier