Windsor-Essex forecast to lead Canada in rate of housing price increases in 2018

Friday, December 15, 2017

The Windsor Star/Dave Battagello

 

http://windsorstar.com/news/local-news/windsor-essex-to-have-highest-housing-price-jump-in-2018-report-says [with video]

 

Windsor-Essex is predicted to lead the nation in 2018 with the highest percentage increase in housing prices, according to the annual housing market outlook report by REMAX Realty released on Thursday.

Not long ago, home builder Andre Goulet would “never in a million years” have dreamed his company Lakeland Homes might one day be barely able to keep up with the frantic pace of new construction across Windsor and Essex County or be involved in the array of luxury residences he is being asked to build.

“The core of our business now is from junior executives,” he said. “People who have great jobs in the (United) States, nurses, teachers and people from Toronto using their equity.

“We have really seen a shift in mentality of people spending money. More of what we are doing now is homes in the $475,000 to $600,000 range. That’s our strongest market. A few years ago, we would have had a hard time believing that would happen.”

There has even been a shift of truck drivers relocating to the Windsor area and building sizeable new homes here because being close to the border allows them to “maximize” their hours behind the wheel, Goulet said.

According to REMAX Realty’s latest forecast, the average residential sale price locally next year will jump by nine per cent. That’s on top of the 17-per-cent average sales price increase across this area in 2017.

The REMAX report includes 32 regions across Canada. Oakville is projected to have the second-highest increase next year at 7.5 per cent, while Montreal is projected to be third at seven per cent.

The average sales price in the Windsor area for this year is $263,302 and estimated by REMAX to jump next year to $286,999. It’s a huge leap from a few years back in 2014 when the average local home sales price was $192,124, according to the report.

The price increase is being driven by “move-up buyers” looking to purchase a residence of greater value than what they currently own, the REMAX report said.

“A strong local economy in Windsor-Essex, coupled with nearby Detroit’s own ongoing economic turnaround, contributed to an active residential real estate market in 2017,” the report said. “Low inventory levels as a result of strong demand have led to a seller’s market in the region and this is expected to continue into 2018.

“Retirees and downsizers are an active segment of the market, often looking for townhomes or one-storey detached homes and are attracted to the region due to its affordability and typically mild winter weather.”

Part of the story is people are still relocating here — often from the Greater Toronto Area — because of lower housing costs compared to other urban centres across Canada, said Glen Muir, real estate broker and owner of the local REMAX realty office.

“It’s also more our economic situation,” he said. “Everything is positive here. We’ve become a place to invest with a lot of jobs.”

New home construction is definitely driving housing market prices upward — with luxury homes such as those being constructed by Lakeland Homes — along with the insatiable ongoing demand for townhouses, Muir said.

“We have baby boomers or those in the 50-plus (age) range who are resistant to paying condo fees,” he said. “The townhouses are brand new, everything is on one floor, they can expand into the basement, plus people still want to go out back and have a little piece of grass to enjoy.”

Townhouses are being constructed in every corner of Windsor and Essex County, Muir said. “Everywhere you look, they are being built.”

Goulet, along with partner Mike McMahon, built 40 new homes in 2016, 60 this year and expects to increase that to 70 in 2018.

“Generally speaking, the bulk of our work is two-storey homes, but we are doing some ranches as well,” Goulet said.

With prices jumping so fast, first-time home buyers are often being left at the curb, he said. That is who Goulet believes will become the next untapped market locally.

He expects properties on vacant land in Windsor to be scooped up by developers who will create row-style townhouses such as those often found in the GTA area.

“We think the market will bring high-density, lower-priced homes into Windsor,” he said. “That’s where we see the market transitioning a bit.”