For years, the Ontario real estate market had been dominated by a few key regions: Toronto, Ottawa and Hamilton. The rest of the province has generally garnered less attention compared to these booming housing markets. Yet, the coronavirus public health crisis changed everything, and now it is the suburbs and rural communities that are experiencing exponential growth and attracting people from these major urban centres.
Barrie has turned into one of the most sought-after real estate markets in the province, appealing to families who want to plant new roots, and real estate investors who want to profit on the investment buzz emanating from Central Ontario. Many industry observers had foreshadowed for years that Barrie was going to experience skyrocketing activity. Still, it was not until the COVID-19 pandemic and a change in real estate consumer behaviours that led to the city’s incredible success this year.
What was once a buyer’s market has quickly transitioned into a seller’s market, thanks to “strong growth” in sales activity and home valuations. But what does the latest data show? The growing real estate market in Barrie is not slowing down.
Barrie is the New Investment Hotspot in Ontario Real Estate
According to the Barrie & District Association of REALTORS® Inc. (BDAR), residential retail sales advanced 51.5 per cent in December from the same time a year ago, totaling 344 units in just one month. On an annual basis, home sales totaled 5,718 units in 2020, rising 23.6 per cent year-over-year.
According to BDAR, composite benchmark price rose 23.3 per cent to $613,200 in December 2020 compared to December 2019. All types of properties witnessed incredible growth at an annualized rate:
Single-family: $644,000 | +24 per cent
Townhouse: $440,600 | +28.8 per cent
Apartments: $372,800 | +11.3 per cent
Overall, the average price of homes that exchanged hands in December soared 34.7 per cent year-over-year, to $744,835.
And these figures are anticipated to grow due to a lack of new supply coming to market, says the President of the Barrie & District Association of REALTORS®.
“Even with the recent influx of new listings overall inventories continue dropping to new record lows. With demand far outpacing supply we’re likely to continue seeing double-digit price growth through early 2021.”
Indeed, BDAR figures show that there were only 276 new residential listings in December 2020, which is up 39.4 per cent from the same time a year ago. Meanwhile, active residential listings plummeted 65.6 per cent from December 2019 to December 2020. Moreover, months of inventory fell to 0.6 at the end of December, down from 2.8 months at the same time last year. This is an important metric because it shows the number of months it would take to sell today’s stocks at the current rate of activity.
Real Estate Investors or Family Homebuyers?
The question that is now being entertained in the broader housing industry is whether Barrie is attracting real estate investors or family homebuyers.
While Barrie has become one of the go-to places for households looking to exit the big cities for quieter lifestyles in rural communities, Barrie also has various factors working in its favour to suggest this could be an investor’s dream. Here are some of the factors currently at play in the Barrie real estate market:
Rental rates have been climbing due to a shortage of rental units. The city has attempted to rectify the situation by allowing homes to be converted into duplexes, raising the possibility of greater income generated from one house.
Are bidding wars prevalent throughout Barrie? It is inevitable due to a short inventory list, and this is bullish for investors because it results in fast turnover.
The Bank of Canada (BoC) has made borrowing cheaper and investing more rewarding. At the onset of the coronavirus pandemic, the central bank slashed interest rates. The result has been more borrowing and a transition away from safe-haven assets, such as guaranteed-investment certificates (GICs) and bonds. With rates expected to remain low (at least for now), it can be more affordable to borrow from mortgage lenders, giving you greater options in the housing market.
A Look at Barrie’s Real Estate Market in 2021
Can Barrie maintain this momentum heading into 2021? According to RE/MAX’s Housing Market Outlook (2021) report, Barrie real estate is expected to jump four per cent to an average price of $569,525 across all property types. Tightening housing inventories and strengthening demand are the city’s two primary factors driving its real estate boom in 2020, 2021 – and beyond.