Anyone watching the Durham Region real estate market over the last decade would likely agree that there was a lot of growth, along with a healthy dose of pessimism at the prospects of a catastrophic market crash due to the continued rise of prices throughout the period.
Thankfully, that crash so often speculated by the media, economists and 'experts' never happened. Indeed, we did experience a correction in 2017 as the effects of the Ontario government's Fair Housing Plan sent shockwaves through the market.
Looking at the chart above, it's clear that prices made a substantial jump since 2010. At the beginning of 2010, the average selling price in Durham was 291,777 (January figure). By the end of 2019, it had jumped to 640,269 - an increase of 119%.
The effects of the Fair Housing Plan had a dramatic effect on not only prices, but in sales volume following implementation in June 2017. If you look at the chart, you could remove the section between December, 2016 and July, 2017, and the trendline would maintain a healthy, albeit slowed, curve upward.
What is also apparent, is the seasonal ups and downs that are typical of real estate markets. Demand, along with prices generally peak in the spring, and fall back in the summer and winter months, with a smaller surge in the fall.
The above chart shows average sale price for all properties by city. What is of particular interest is how similar the performance is between market areas.
Smaller markets show more volatility in average price (like Scugog - included in the chart, Uxbridge and Brock), simply because there are less properties changing hands in a given period, and the numbers can be easily skewed. The trendline over a period of years (that is, with more data to normalize the model) still shows growth of these markets.
The chart above illustrates the number of active listings for the decade.
Of particular interest is the patterns shown for seasons each year, with active listings peaking in the spring, dipping in the summer, then rebounding and falling for the winter.
Note how the number of active listings declined each year until 2017, when demand was severely curtailed with the introduction of the Ontario Fair Housing Plan.
Actives were pretty consistent since then, with the exception of 2019 when the number of active listings took a much steeper drop as the year progressed.
The chart above illustrates the number of days on market averaged for sold listings.
It follows a very similar pattern to the active listings chart, with progressively lower number of days on market (with seasonal changes each year) until 2017, when they jumped from a low of just 7 in April, to 30 the following January.
Several key projects and trends have had a big influence on our market over the last ten years and will continue to impact our market heading into the twenties.
Highway 407, 412 and 418
The eastward expansion of highway 407, combined with the new north-south arteries to the west of Whitby and east of Courtice provided much needed high-speed arteries to north Durham, Clarington and beyond. No doubt, these new roads offer more options for residents and businesses in getting around Durham and into the city much faster than when the 401 was the only option.
Darlington Nuclear Plant Refurbishment
This project created thousands of quality jobs in construction over close to ten years, making Clarington homes highly sought for both owner-occupied and rental properties.
Not unique to Durham Region, large numbers of educated and wealthy immigrants each year have driven demand for the housing market across the GTA. As more people come into the area, demand for housing has been strong and has contributed to the growth of prices in the area.
The rise of Ontario Tech University, combined with Trent University in Oshawa has increased demand for rental accommodations and condominiums near to campuses in the north Simcoe Street corridor and Windfields area, as well as downtown.
The shutdown of vehicle manufacturing at General Motors has been influencing our community since the 1980s, when employment levels there were well over 20,000, with many more thousands of jobs at feeder plants in the region.
There was much speculation that the elimination of manufacturing jobs there would decimate local real estate values. As you can see from the numbers, not only did that not happen, but values have continued to climb.
Had this not occurred, it is likely that there would have been even more growth in our local market.
Our market looks poised to continue to benefit from many of the growth drivers mentioned above, combined with the ripple effect of rising values in Toronto and surrounding areas.
Generally speaking, as long as supply issues are prevalent, we will continue to have demand-driven increases in values, provided that general economic factors don't bring down values universally.
Examples of things that could curb growth or even drive shrinkage in values include recession, increases in interest rates and government interventions like the ones we saw in 2017.