We have taken a deep dive into how the residential real estate market has performed over the last 30 days compared to this time last year, some of the current trends we are seeing and examined the effects of the government’s policy changes over the last two years.
Specifically, the implementation of the Foreign Buyer Tax in April 2017, 5 consecutive increases to the prime lending rate in the past 18 months and the introduction of tighter mortgage qualification rules in January 2018. These changes certainly have had their desired impact on the market.
The numbers have been tallied and overall, the market is steady with inventory balanced at 3.4-month supply; 189 units selling in the past 30 days and a current inventory of 637 active listings, with residential sales down 11.3% year-over-year.
Taking this a bit further, we’ve broken down residential properties into two categories; freehold (detached and townhomes) and condo.
Freeholds are holding a 4-month supply with a significant 16.8% drop in unit sales year-over-year. Specifically, when grouping properties by price points, we see that the $1-4m segment is experiencing some weakness with more supply than demand, and in fact, has underperformed all year with a 18-44% drop in unit sales year-over-year, with the $2-3m market having the most significant decrease at 44.8%.
Interestingly, the strongest market segment is properties under $1m, which is up 13.1% year-over-year and the $5m ultra-luxury segment which is even at 13 sales in both 2017 and 2018, YTD. In fact, this segment saw a record-breaking October, with 4 home sales between $7-8m – two of which were sold by the Goodale Miller Team.
The Condo market in Oakville continues to show decent strength, with only a 2-month supply of inventory and overall growth of 11.6% in unit sales year-over-year.
Demand sharply increasing in the $3m segment with 5 sales YTD, whereas in 2017 there were none. The shift to lower priced condos is booming: new home buyers have few choices in Oakville under $1m and we are seeing demographics impact the market as baby-boomers sell larger homes and right-size.
An important factor to note is that Chinese buyers have accounted for approximately 35% of buyers in the $2m segment from 2016-2017 and only represent 19% YTD in 2018. This is a significant reduction and an imperative one to understand. We took a close look at this buyer group in the video I sent your way in late September and considered that this group has been most negatively affected by the January 2018 mortgage qualification changes. If you’d like to see it again, you can view it at the following on goodalemillerteam.com.
Overall, 2018 is shaping up to be an average year for the Oakville Real Estate market and in terms of activity, we are currently experiencing an earlier than normal slowdown as we reach the close of the year and enjoy the festive holiday season.
It’s a given to know the market, but it’s a must to identify and understand its trends, and the degree of impact external economic changes have really had. If you’d like to know more about how your neighbourhood is performing and what this means for you, connect with our very own Murray McKeage.