May 2023 sales in Oakville saw 14 per cent more detached homes sold than in May 2022. Buyers continued to find themselves in bidding wars having to make quick decisions on what is often their largest asset. As the presidents of both the Toronto Real Estate Board and Oakville Milton District Real Estate Board clearly indicate prices are being pushed by a lack of supply.
"If we don't quickly see housing supply catch up to population growth, the economic development of our region will be hampered as people and businesses look elsewhere to live and invest,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
GTA Update
Across the GTA, owners sold 9,012 (or 1,749 more properties) in May 2023 than in 2022, a 24.1% increase. Over the same period, GTA property values decreased by 1.1% to $1,196,101, down $14,271 but up by 3.7% from April. This marks the fourth consecutive month of increasing prices.
Since January, home prices have risen just under 15%, slowly approaching May 2022 values.
"Renewed competition between buyers is once again shining the spotlight on the persistent lack of listings and the resulting impact on affordability," continued Mercer.
Oakville Update
During the last month, sellers in Oakville listed 565 properties and sold 327, up by 31 from April. Available inventory declined to 2.4 months, unchanged from April.
The average residential property sold for $1.554 million, down $26,000 from April; a sale took 19 days, a decrease of a week from April.
Buyers, on average, were paying 103% of the listed price, up 2% from April and the second month that buyers, on average, continued paying more than listed prices.
"The sales numbers remained consistent with previous years, but the number of new listings was down significantly - putting upwards pressure on pricing and resulting in many multiple-offer situations across the region,” says OMDREB President Hunter Obee.
Year-over-year home prices
A typical residential property in Oakville now costs $1.486 million, which has dropped by 1.3% since May 2022 but is up $43,000 from April 2023. An average detached home price is $1.954 million, up 0.66% and up $82,000 from the previous month.
An attached home is $1.238 million, down 0.44% from a year ago. A townhouse will run you 3.11% more at $954,100. A condominium apartment costs $671,600 - down 13.39% from last year and up from the previous month by $6,000. Apartments were the last form of housing to be affected by mortgage rate increases, so they will likely be last to recover.
May 2023 Oakville residential real estate statistics
| Type | Units Sold | Median Price | % LP to SP | DOM |
|---|---|---|---|---|
| Detached | 166 | $1,870,000.00 | 103% | 9 |
| Semi-Detached | 12 | $1,278,500.00 | 105% | 7 |
| Link | 1 | $1,338,000.00 | 107% | 1 |
| Condo Apartment | 66 | $675,000.00 | 98% | 28 |
| Town House - Condo | 30 | $940,500.00 | 104% | 15 |
| Town House - Freehold | 52 | $1,262,500.00 | 106% | 11 |
DOM - total days a property is for sale; % LP to SP - the percentage difference between the list price and the sold price.
The best 5-year fixed-rate insured mortgage is 4.49%, which increased by 0.25% from the April real estate update. However, a 3-year variable rate is available at 5.85%, up 1.21%. Last month we indicated that most banks were counting on the Bank of Canada to drop its lending rate; that proved wrong as they increased it by a quarter of a point to 4.75%. Betting on what the Bank of Canada will do to bring inflation rates down, regardless of the impact on individuals, is not advisable.
Bank of Canada's Tiff Macklem increased the Bank of Canada rate as the Consumer Price Index (CPI) increased modestly to 4.4% or 0.1%. It peaked at 8.1% in June 2022. This modest increase caused Macklem to bump up lending rates by 0.25% to 4.75% as he is determined to bring inflation back down to 2%.
“The demand for ownership housing has picked up markedly in recent months. Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market. In addition, strong rent growth and record population growth on the back of immigration have also supported increased home sales. The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring,” said TRREB Chief Market Analyst Jason Mercer.
The recent increase in mortgage rates as a result of the Bank of Canada's decision to once again use its lending rate as its primary tool to decrease demand and slow inflation appears at odds with TREB president's comments that if supply doesn't increase, the region may be negatively impacted.