"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.
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Cell 289-838-5105 My Website
Welcoming your comments!
Edward Drennan, P.Eng.
Not intended to solicit buyers and sellers currently under contract with another brokerage