The average selling price in Durham Region increased by 26 percent from December of 2015 to December 2016. Which means, if you were looking for a house a year ago in the $400,000 price range, now that same house is worth over $500,000.
Good news to home owners, bad news for those hoping to get into the housing market.
“In December 2016, Durham Region led the Greater Toronto Area (GTA) with a 26 per cent year-over-year percentage change on the MLS home price index,” said Roger Bouma, President of the Durham Region Association of REALTORS® (DRAR). The average selling price in Durham reached $570,957 last month. In comparison, the average selling price was $451,671 during the same period last year, DRAR reported. Homes have continued to sell quickly in an average of 14 days compared to 21 days last year.
The 2016 year-to-date value of all home sales in Durham Region totalled over $6.7 billion in dollar volume, a 29 per cent increase from 2015. Great news for home owners whose net worth is quickly increasing.
Uxbridge had the highest increase in year-to-date average selling price growth with a 31 per cent increase from 2015. The second highest increase was Oshawa at 27 per cent, and third highest was Brock and Clarington at 21 per cent. Durham Region is also selling the quickest in the GTA with a year-to-date average of 12 days-on-market, 3 days quicker than Peel Region and 4 days quicker than York Region. Ajax, Oshawa, and Whitby sold the quickest in Durham Region with an average of 10 days-on-market.
Although homes are selling well, and at ever increasing prices builders and developers worry about affordability issues. There has been a pent-up demand for houses in Durham Region for a number of years as supply even now, continues to lag well behind demand as evinced by the quick sales noted above. There are a number of reasons supply has not kept up and many contributing factors that are unseparably intertwined. Factors such as: land prices, lack of supply of serviceable land, development costs, uncertainties related to development including government regulations, fees, approvals etc. Worsening supply constraints in Durham Region will only exacerbate the problem.
It seems that when houses are selling well, government fees, taxes and regulations increase. Take for instance in Whitby, where local councillors are contemplating raising the development fees by 80%. This increase from 12,708 to $22,848 for a single or semi-detached home, may be the difference for a new home buyer to be turned down for a mortgage. Or look at Oshawa where Councillors recently voted to implement a hefty fee on developers for future maintenance of storm water ponds. This will be a fee that is estimated to be from $60,000 to over $180,000 which will be collected at the time of a subdivision’s draft plan approval for use 10 to 20 years later for maintenance of the pond. All these government fees and taxes are bundled into the price of new homes, and as the price of new homes increases, the price of existing homes follows.
There is growing concern that our young adults’ hopes of owning a home will remain only a hope…that is bad news for everyone.
Author: Anita DeVries – executive officer of the Durham Region Home Builders’ Association.