Ontario Housing Market Report
- Average home prices in Ontario have increasedby 22.9% in a year to$912,763
Average Home Prices in Ontario for November 2021
Historical Average Home Prices in Ontario
Ontario Housing Market as of November 2021
Home prices in Ontario continue to heat up as Ontario’s housing market begins to enter the winter season. For November 2021, the average sold price of a home in Ontario was $912,763. That represents a 22.9% year-over-year increase from November 2020's average sold price of $751,508.
November 2021 has also been a record-breaking month for some of Ontario’s major housing markets. Out of Ontario’s five major housing markets, Toronto and Brampton have average sold prices this November 2021 that is higher than the prices seen this past spring. In other words, Toronto and Brampton currently both have record-breaking average home sold prices, while Ottawa, Hamilton, and Mississauga average home prices are still below their high-water mark. Average sold prices in Toronto’s housing market and Brampton’s housing market continue to break all-time highs this November 2021 after already breaking price records in October 2021. For other major Ontario housing markets, prices are all up year-over-year with percentage gains in the double-digits.
From a city-level comparison, Toronto was the only major housing market in Ontario to see a year-over-year increase in sales. The other major Ontario markets, namely Ottawa, Hamilton, Mississauga, and Brampton, all experienced a decrease in sales year-over-year. Toronto’s 3% year-over-year increase in sales is attributed to a massive 41% YOY increase in condo transactions over the past year. Ontario detached, semi-detached, and townhouse transactions are all down year-over-year for all major Ontario markets.
Ranking Ontario’s housing market in terms of annual price growth, Brampton led the way with a 34% year-over-year increase in average sold prices. Next up was Hamilton’s housing market with a 28% year-over-year increase, followed by Toronto with a 22% year-over-year increase, then Ottawa with a 19% year-over-year increase. Mississauga’s housing market was at the bottom of the pack with a 15% year-over-year increase in average home sold prices. While Mississauga’s annual home price gain is modest compared to other Ontario cities, it still remains respectable compared to other Canadian housing markets. For instance, Vancouver’s housing market has had a 16% year-over-year price increase for November 2021, while Calgary’s housing market sits with an 8% year-over-year price increase.
Looking at year-over-year changes in transactions, Toronto was the only housing market to have more sales in November 2021 compared to November 2020. Mississauga transactions declined 0.5% YOY, Hamilton transactions declined 3% YOY, Ottawa transactions declined 9% YOY, and Brampton transactions declined 11% YOY. For comparison, Montreal’s housing market transactions declined 18% YOY, while transactions in Calgary increased 47% YOY for November 2021.
Toronto, Mississauga, and Brampton all have average sold prices above the $1 million mark this month. The average price in Toronto for November 2021 was $1,163,323, while Brampton’s average sold price wasn’t far off at $1,140,140. Rounding out the top three is Mississauga with an average sold price of $1,039,407. The Hamilton and Ottawa housing markets remain cheaper alternatives to the GTA’s expensive home prices. Hamilton’s average sold price for November 2021 was $835,640, while Ottawa’s average sold price was $644,158.
The expansion of the CMHC First-Time Home Buyer Incentive in the Toronto CMA, which spans most of the Golden Horseshoe Region, is likely to provide a small boost to housing demand for sub-$700K properties in the GTA. In addition, the CMHC recently adjusted their standards for mortgage insurance, broadening the eligibility to allow more levered and lower credit applications. While insured mortgages are becoming a smaller proportion of total mortgage origination volume, this is still likely to help marginal buyers enter the market.
Counteracting these changes, the Office of the Superintendent of Financial Institutions (OSFI) recently raised the benchmark rate for the mortgage stress test. This is expected to limit the affordability of both insured and uninsured borrowers.
Housing Markets of Major Cities in Ontario
| City | Average Home Prices (November 2021) | Population (2016) |
|---|---|---|
| Toronto | 2,731,571 4.5% vs. 2011 | |
| Ottawa | 934,243 5.8% vs. 2011 | |
| Mississauga | 721,599 1.1% vs. 2011 | |
| Brampton | 593,638 13.3% vs. 2011 | |
| Hamilton | 536,917 3.3% vs. 2011 |
Ontario Housing Market Forecast for 2022
Looking forward, Ontario’s housing market forecast for 2022 depends on a few factors. The primary trigger for a downturn in prices is interest rates, while increased numbers of newcomers will have an upward pressure on prices.
Low mortgage rates have helped to stoke demand and have contributed largely to the massive price increases over the past year. Demand has been fueled by such abnormally low mortgage rates, breaking record-lows in fact, which makes it cheaper for buyers to borrow money. This period of low interest rates is set to end as the Bank of Canada signals that interest rates will eventually increase over the next few years. The impact of a jump in mortgage rates is still up in the air, as it is still not certain exactly how much interest rates will increase by. However, inflation has been creeping upwards, which signals that rates will surely go up, not down.
Immigration, looking mainly at newcomers and international students, has been largely absent throughout much of 2020 and 2021. This is also set to change as schools open back up to foreign students and immigration returns to normal levels. More people looking for a home will boost demand, especially as we head into the fall. Met with a shortage in housing inventory, a surge in buyers will introduce upward pressure on housing prices.
Two factors are now at play: whether an interest rate hike will become the catalyst for a correction in housing prices or if higher immigration levels will be enough to boost demand to ward off a dip in buyers from increased rates. Other factors include unknown policy changes emanating from the upcoming federal election, such as policies affecting supply of housing, along with the rate of Canada’s post-pandemic recovery, population growth, and taxes.
Ontario’s Housing Market Forecast: Things to Watch
| Negative Impact | Positive Impact |
|---|---|
| Higher Interest Rates Government Policies: Mortgage Stress Test Changes Vacancy Tax and Foreign Speculation Tax Zoning and Increased Supply of Housing Rent Control | Higher Immigration Levels Housing Inventory Shortage Stronger Economic Recovery |
A look at house price forecasts by Canada’s major banks gives us a look at what they predict Ontario house prices will be in 2021 and 2022.
RBC predicts that Ontario home prices will increase 15.8% in 2021, and 3% in 2022. RBC also forecasts that home sales in Ontario will increase by 11.3% in 2021 and decrease by 20% in 2022.
TD predicts that Ontario average home prices will rise by 19.8% in 2021 before falling 1.3% in 2022. For Ontario home sales, TD forecasts a 17.4% increase for 2021 and a 16.7% decrease in 2022.
Ontario Housing Market Forecast 2021 and 2022
| Forecast By: | 2021 Price Growth | 2022 Price Growth |
|---|---|---|
| RBC | 15.8% | 3% |
| TD | 19.8% | -1.3% |
Housing Markets Across Canada
Data sourced from the Toronto Regional Real Estate Board (TRREB) and the Canadian Real Estate Association (CREA). Any analysis or commentary is the opinion of the analysts at WOWA.ca and should not be construed as investment advice. Please consult a licensed real estate professional before making a real estate investment decision. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.