Oakville Housing - Good Investment or a Bubble? Part 1

By
Real Estate Sales Representative with Century 21 Miller Real Estate Ltd. 4793863

"Oakville’s median residential sale price for the month of March was $1,298,888, an increase of 47.77 per cent from $879,000 compared to March 2016. The median sale price in Milton was $817,500, an increase of 48.64 per cent from $550,000 compared to the same time last year." (Source: CREA)

To better gauge public reaction to this occurrence, during the month of April, I have had the pleasure talking to about 200 home owners in the Oakville Area.

There was a common thread in their questions asked:

1) We may be thinking of selling, but is now the best time or should I wait to gain an even greater increase in our home equity?

2) Love the increased price of our home, but in this heated market where could we go that would not also have the same elevated home costs & lack of inventory? And... we really love living here is the money worth the move away?

3) Is this a bubble or is the growth based on sound long-term supply / demand fundamentals?

4) What will be the impact of the latest government changes of the 15% foreign investor speculation tax and rental increase caps?

 

Really tough questions and no one really knows for sure.

Some thoughts at this point:

A) Government policy has directed measures to cool off the market (e.g. foreign investor tax & land development fast tracking) - initial results on BC's similar program do appear to be muted, however:

B) Oakville remains a highly desirable place to live - based on a strong vote to stay here

C) Most still favour buying rather than selling - based on comments received

D) Local interest rates have remained low, although US Fed policy has signaled and already implemented some increases, which usually translates into eventual Bank of Canada, then Canadian Bank mortgage rate hikes. If that does happen, it would most likely impact housing prices as fewer would be able to service the resultant higher mortgage payments -- for example a 1% hike in interest rates on a $750,000 mortgage would cost an extra $625/month.

E) The real estate bubble witnessed south of the border was largely influenced by next to zero down mortgages / relaxed policies. Here we have 20% down mortgages or oversight by CMHC to tightened up lending risks.

F) Finally, assuming the supply-demand fundamentals are sound young couples may require more support from family, or time living at home, before acquiring their first homes.

 

Contact me when making your next move!

Cell 289-838-5105 My Website

Edward.Drennan@Century21.ca

 

Welcoming your comments!

Edward Drennan, P.Eng.

 

Not intended to solicit buyers and sellers currently under contract with another brokerage

 

Comments (17)

Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Welcome to active rain. Good luck in achieving your goals on active rain 

May 03, 2017 02:41 AM
Edward Drennan

Many thanks!

May 03, 2017 05:39 AM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

Welcome to ActiveRain! It's interesting to see the different real estate challenges in different areas. I look forward to reading more about your area.

May 03, 2017 03:51 AM
Edward Drennan

Thank you


Yes an interesting market!

May 03, 2017 05:40 AM
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Price is a function of Supply and Demand ! Our economy would have to downturn to cause the next bubble effect !

May 03, 2017 06:02 AM
Edward Drennan

Thank you for your comment Michael

May 03, 2017 11:01 AM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, Edward Drennan there are many factors influencing the market.... a level market is the ideal for buying and selling, is one is doing both.... it's all about timing!!!

May 03, 2017 07:36 AM
Edward Drennan

Indeed


Where is my crystal ball now ;-)

May 03, 2017 11:03 AM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

and welcome to ActiveRain...it's a great place to learn, share, market and network....and I hope you enjoy it and benefit from all of it...

May 03, 2017 07:37 AM
Edward Drennan

Thank you Barbara!

May 03, 2017 10:59 AM
Sybil Campbell
Fernandina Beach, FL
Referral Agent Amelia Island Florida

Welcome to Active Rain and congrats on your frst blog post.  This is a great place to meet some awesome professionals Edward Drennan.

May 03, 2017 10:23 AM
Edward Drennan

Thank you Sybil!

May 03, 2017 10:59 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Edward welcome to ActiveRain and congratulations on posting your first blog on this site.

May 03, 2017 06:57 PM
Edward Drennan

Thanks George for the welcome

May 04, 2017 04:33 AM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Thanks Edward,

Welcome to Active Rain, looking forward to reading many more of your posts, let me know if there is anything that I can do to help as you get started here.
All the best of success to you.
Bob

May 03, 2017 10:46 PM
Edward Drennan
Century 21 Miller Real Estate Ltd. - Oakville, ON
Serving the Oakville, Ontario Area

Hi Bob, nice to connect on the Rain

May 04, 2017 04:34 AM
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
New Hampshire Home Stager

Welcome to the Rain! Great first post and I look forward to reading more!

May 06, 2017 06:38 PM
Edward Drennan
Century 21 Miller Real Estate Ltd. - Oakville, ON
Serving the Oakville, Ontario Area

Thanks Sharon!

The "stage" is set for wonderful networking opportunities ;-)

May 07, 2017 09:04 AM
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Edward Drennan Welcome to ActiveRain.

This is The Best place to learn, share and build relationships with like-minded professionals.

May 08, 2017 10:39 PM
Edward Drennan
Century 21 Miller Real Estate Ltd. - Oakville, ON
Serving the Oakville, Ontario Area

Thanks Praful

In the GTA (Greater Toronto Area, Canada) we have an almost 50% hike in residential prices over the past year, how is it in your area?

May 09, 2017 11:55 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Excellent post Edward.  It's always good to analyze things from every direction and make a judgment based on the individual needs and desires.  

Welcome to ActiveRain. It is a wonderful place to reach the public through your blog and to learn from other industry professionals.  We all love sharing our knowledge and learning from each other.  


I encourage you to interact in the community through reading and commenting on other blogs and in the Q&A section.  Life long friends are made here.    

I look forward to reading more of your blog posts.  Blog on...

May 10, 2017 09:57 AM
Edward Drennan
Century 21 Miller Real Estate Ltd. - Oakville, ON
Serving the Oakville, Ontario Area

Thank you Carol, I will continue to play in the Rain

May 10, 2017 01:35 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Edward

Welcome to ActiveRain! It's great to see you getting involved with your blogging, sharing what you know about your market, and participating in the commenting. It's a great place to learn, share, and make friends, as you no doubt are finding out.

Keep up the good work.

Enjoy your weekend!

Jeff

May 13, 2017 02:04 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

I enjoyed this post the first time through Edward and was delighted to see that Carol Williams included it in her weekly featured posts column.

May 16, 2017 09:59 PM
Edward Drennan

Thanks Bob!


Enjoyed reading Carol's column articles

May 17, 2017 06:12 AM