Renfrew County real estate has joined the growing list of booming regions in Ontario that have been experiencing record-setting sales and price growth. The province’s housing sector has witnessed impressive gains in detached, semi-detached and row houses. While the figures have been through the roof in Toronto and Ottawa, it is the smaller towns and rural communities that are capturing attention.
Across the province – and, really, the entire Canadian real estate market – suburbs and rural areas are reporting residential transactions and housing valuations never seen before. Or, at the very least, they have not been this high in decades. Have all the urban dwellers suddenly developed an affinity for the small-town charm in some of the province’s most beautiful municipalities?
Homebuyer trends have evolved considerably since the start of the coronavirus pandemic. More professionals working from home and children across the province pivoting to online learning, the need for more space and the desire for greater affordability have all become major factors driving families away from urban centres. Homeowners that cashed in on their expensive urban properties are using their enormous equity to outbid homebuyers in in smaller communities that promise more real estate bang for your buck, driving up prices in the process. Throw historically low interest rates into the mix, and you have today’s ultra-bullish housing market.
How is the Renfrew County real estate market performing today? The data shows it is red-hot.
Prices Hit New Records in Renfrew County Real Estate Market
According to the Renfrew County Real Estate Board (RCREB), residential sales spiked 105.6 per cent year-over-year in March, totalling 296 transactions. This is the third-largest monthly gain in the association’s history. In the first three months of 2021, home sales have surged 62.8 per cent from the same time a year ago.
Housing prices have soared, too. The average price of a home in Renfrew County increased at an annualized rate of 35.2 per cent to $408,803. The year-to-date average price, which is a more comprehensive metric, soared 35.3 per cent year-over-year to $378,993.
The dollar value of all property sales in March reached $121 million. This is roughly double from last year’s tally and represented the biggest value of homes sold for any month in the board’s history.
On the supply side, Renfrew County is experiencing the same trend as did other parts of the Ontario real estate market. New residential listings increased 67.4 per cent from last year to 385, while active residential listings dropped 47 per cent to 259 units by the end of the month. The former was the most significant number of new listings added in the month of March, while the latter was the lowest reading for the month in about 15 years.
Months of inventory, the number of months it would take to sell present supplies at the current rate of sales activity, clocked in at 0.9. This is down from 3.4 months at the end of March 2020 and is below the long-run average of 7.3 months. Inventory is struggling to keep up with the fierce demand in this local housing market.
Housing starts and completions have been subdued. In the fourth quarter of 2020, housing starts totalled five and completions were eight, according to Canada Mortgage and Housing Corporation (CMHC). These lacklustre figures won’t help quell Renfrew County’s supply struggles.
Could Higher Property Tax Put a Lid on Renfrew County’s Growth?
The Toronto Star recently reported that the Renfrew County council is reviewing the final draft budget numbers, and it includes a proposal to raise property taxes by 2.5 per cent, or $28.13 per $100,000 assessment. The tax rates are scheduled to be considered at a council meeting in May. When housing valuations are soaring, this has the potential to push first-time homebuyers to reconsider their options and out-of-town buyers to look elsewhere. But nothing is set in stone, says Treasurer Keray O’Reilly.
“We need council’s direction with respect to the final number,” he said.
The Small-Town Ontario Boom
How much longer can the small-town housing boom last in Ontario, or the rest of the country?
The primary factors driving the current market spikes are the fundamentals: supply is limited, and demand is fierce. When the COVID-19 public health crisis started more than a year ago, the real estate industry could not have envisioned the sudden soaring demand for family-sized three-bedroom houses or two-bedroom townhomes in any of the province’s rural communities. In other words, these towns – provincially and nationwide – could not keep up with the enormous demand. Some places are seeing an increase in housing starts, while others are either stagnating or falling.
An increase in interest rates might help to soften activity, but until new supply comes online, it is going to be challenging to cool down the booming sellers’ markets across the province.