Sales in Durham Region came in at 564 units, down 10.7% from October and 44% from
November of 2021. The notable decrease in sales is due, in large measure, to the increased
costs of borrowing money. Inventory levels remained consistent, however, with last year’s
numbers with 1,037 new listings on the market compared to 1,044 at this time last year.
Interestingly, an interest rate of 5.25% today, compared to a rate of 1.99% in February shaves
$300,000 off the sale price of a home to maintain the same payment. The crisis in housing
facing us is one of affordability and this is a result of a lack of supply. So far, governments have
proven themselves unable to improve the situation. With increased immigration fostered at the
federal level, this problem is projected to both continue and worsen.
Over the past 2 years, prices escalated dramatically due to high demand and low inventory
although many buyers simply could not afford to get into the market with the dramatic run-up in
prices. The government stepped in to cool prices, along with inflation generally. Even though
prices have decreased, affordability hasn’t increased, due to the higher cost of money. Those
people that could’nt buy before when rates were low, still can’t buy due to higher borrowing
costs. The decrease in prices has not been enough to compensate for the increased cost of
money.
The real problem is the future. When rates eventually decrease, buyers will flood back into the
market and prices will again skyrocket due to there not being enough homes to meet the
demand. Government policy of increasing immigration without addressing housing supply feeds
into this conundrum. Federal and provincial policies do not match what’s happening on the
ground and the problems created have spilled over to the rental market, which is a mess!
The Average Price in Durham was $892,677 in November representing a 10.6% decrease from
a year ago. Compared to the drop in sales numbers, that is not a bad statistic at all.
Sale Price to List Price stood at 100%, reflecting tight inventory and decent demand. The
Average Days On Market was 17 and months of inventory stood at 1.8 months. Sales to New
Listings came in at 54.4%, comfortably in balanced market territory.
Sales for the Year To Date came in at 9,500, down 32% from Last Year’s Year to Date Sales of
14,041 units.
While Williams & Follows had their best year ever, we cringe at the difficulty our young
Canadians face in getting that first roof over their heads and this includes our own sons and
daughters. Clearly the policies put in place over past decades don’t favour this cohort OR,
buyers need to modify their expectations. Maybe you need to start out in that condo, then move
up to a townhome and finally, a detached home if that’s the dream. When starting out, the
primary push should be toward getting a roof, any roof, over your head so that you’re paying
yourself and not the landlord. Over time, the increased equity you build up will propel you into
the next, larger home. More Canadians have built wealth this way than by any other method.
