‘More negotiating power’: House prices in Oakville plummet $200,000 and buyers and sellers are expressing mixed emotions
House prices in Oakville continue to decline as do overall real estate transactions when it comes to homes.
The Toronto Regional Real Estate Board (TRREB) released its May numbers, and it shows some interesting trends for Oakville.
Overall, prices for all home types in Oakville are falling, from an average sale price of $1,691,997 in April to $1,495,926 last month, according to the latest Market Watch report from TRREB. This represents a 12 per cent decline.
For detached homes in Oakville, the picture is similar.
The average detached home in April sold for 2,146,994 in Oakville. May saw an 11 per cent drop to $1,929,573.
“Bank of Canada rate hikes, including the 50-basis point hike on June 1, are impacting home buyers in the short term. There is now a psychological aspect where potential buyers are waiting for a bottom in price. This will likely continue through the summer. However, as home buyers adjust to higher borrowing costs, housing demand will be supported by extremely low unemployment, high job vacancies, rising incomes and record immigration,” said TRREB president Kevin Crigger.
The price drop in Oakville has left residents with mixed feelings.
Those trying to sell their home, including Larry Pecoraro, say “it’s a bit of a bummer,” but agree the real estate market has to encounter a “correction” of sorts.
“It’s has been a rapid change from a few months ago,” he said.
This is the first time in 2022 — and the first time since September of 2021 — that the average sale price for a detached home in Oakville is under $2 million.
However, some prices for home types are actually up in Oakville, including semi-detached homes, which sold for an average of 1,297,250 last month, up from 1,200,667 in April.
This leaves Jackie and Fred Hummel, looking to move to north Oakville, some hope.
“It all evens out and it really depends on timing and need at an individual level,” Fred said.
After climbing rapidly during the COVID-19 pandemic, prices across the GTA have been falling since the Bank of Canada (BoC) started increasing its benchmark interest rate, causing an increase in borrowing costs. And prices could fall even further with more rate hikes expected in the coming months.
To date, the BoC has implemented three straight interest rate hikes, raising its overnight lending rate from 0.25 per cent to 1.5 per cent since March in an effort to curb rapidly rising inflation.
“Even if house prices are up sharply on a year-over-year basis, some markets have recently seen declines. With inflation well above the two per cent target and the Canadian economy overheating, the bank’s No. 1 priority is to get inflation back to target and we are raising interest rates to make that happen,” BoC governor Tiff Macklem said during the bank’s financial system review news conference on June 9.
More balanced market conditions have provided buyers with “more negotiating power,” TRREB said in its report.
Overall house sales are also on the decline in Oakville; from 268 in April to 259 lat month, according to the report.
– with files from Graeme Frisque