Housing markets all across Canada skyrocketed during the pandemic, with prices jumping everywhere from remote rural communities to suburban neighbourhoods to downtown developments. But the housing market in one southern Ontario city was named as the most overvalued in Canada: Peterborough.
An assessment of housing price valuations in Canada during the fourth quarter of 2021, carried out by Moody’s Analytics, found that Peterborough homes were overvalued by a jaw-dropping 107.8%. It just beat out St Catharines-Niagara for the title, with homes there said to be overvalued by 106.9%.
As a report from REMAX released on Friday notes, average home prices in Peterborough in May are down slightly from the more than $864,000 average reported in the Moody's analysis to $836,843. This, however, still marks a 19.8% annual increase. Single-family homes in particular now sit 27.4% above the same time last year.
The Moody's analysis noted that the average annual household income in Peterborough is about $70,000, meaning that the average resident could only be approved for a mortgage of roughly $300,000. This leaves many residents unable to buy in their own city and fulfill their dream of home ownership.
At the same time, the Ontario city is experiencing a slow down in sales, having plummeted 34.3% annually in May with just 222 homes changing hands. Sales are now down 7.2% below the five-year average and 17.7% below the decade average for this time of year, the RE/MAX report notes.
“Sales activity was down in May from last year’s near-record level, a trend that we’re seeing play out almost everywhere in Southern Ontario,” said President of the Peterborough and the Kawarthas Association of REALTORS® Inc. Kate Kidd. “New listings are beginning to return to the market, which is lifting overall inventories from their historically low levels. However, it’s going to take more than a few months of stronger supply to have any meaningful impact on the market balance in the long term.”
Peterborough has indeed seen a jump in new listings, with new residential listings experiencing an 8.4% bump in May, bringing the total up to 425. This is 11% above the five-year average but 3% below the 10-year average.
