Housing demand remains high in northeastern Ontario, but situation improving, say Realtors

Housing demand remains high, and supply is low in several northeastern Ontario cities. But 2023 promises to be a better year for buyers, according to real estate agents from the region.

Sudbury Real Estate Board chair Adam Haight said while housing demand is down from peaks in 2022, thanks to rising interest rates, it's not likely to return to pre-pandemic levels.

"Going forward in 2023 I honestly believe that we're still looking at a sellers' market, probably through the whole year," Haight said.

"And you know, depending on what the interest rates do, if they continue to go up then there may be a chance that we start to see a little bit of a decline."

In 2019, the average price for a home in Sudbury was around $265,000, but that has now gone up to more than $450,000, Haight said.

But he added current prices are lower than highs from the summer of 2022. Over the course of the year, the Bank of Canada made several increases to interest rates, cooling the market. 

Despite limited available housing stock in the city, Haight said buyers are better off today than they were last year, when more than 10 people might have been competing to purchase the same home, with all conditions waived.

Jonathan Mogg, president of the Sault Ste. Marie Real Estate Board, said the housing market in his city is showing signs of more stability.

"I really do think that it's a good time for the buyers that have been disillusioned in the buying process," he said.

"Now might be the time to think about actually going for it and trying again because I am noticing the stability in the market and it is a good time for buyers to really start, you know, trying to get out of that rental situation and have that chance to buy their first home."

Mogg said he recently helped some clients who had been in the market for a while, purchase their homes because they were able to be more cautious and get the homes inspected before buying.

He said higher interest rates have also reduced demand from investors from other parts of Canada, which means locals will face less competition for homes. 

The market couldn't sustain the way it was going.- Ryan Humble, past president, North Bay Real Esate Board

But as in Sudbury, Mogg said prices in Sault Ste. Marie are unlikely to drop below pre-pandemic levels, even as interest rates continue to rise.

"You know, $250,000 used to be able to get you a three-bedroom bungalow in a nice location," he said.

"Now you're either going to be not staying in as desirable a location, or you're just not going to get quite the same size of house."

Ryan Humble, past president of the North Bay Real Estate Board, said he is glad the Bank of  Canada has raised interest rates to help correct the housing market and tackle inflation.

"The market couldn't sustain the way it was going," Humble said.

"The prices were just escalating so quickly and so much. It was hard to keep up with, and you know, for a lot of these first-time buyers it was quickly … becoming out of reach for them. That's something that we, in the north, we haven't really had those issues in years past."

Humble said the average sale price in North Bay peaked at around $565,000 last May. 

Now that demand is not as high as it was last year, Humble said buyers in North Bay now have the "luxury" to do their research and due diligence before they purchase a home.