The conventional wisdom has been that if you want to save on housing, you would leave the big city and move to small towns and rural communities where you can potentially find a single-family home within your budget. This traditional concept has been pushed aside with recent shifts in the Canadian real estate market. With more young families and professionals fleeing the major urban centres in favour of less-dense municipalities, many smaller communities have enjoyed exceptional growth throughout the pandemic-era housing boom, one of these being the Brantford housing market.
Whether this trend is sustainable or not is the big question right now, with many offices in large urban centres reopening their doors and reinstating in-person work, impacting demand levels is smaller communities. In addition, rising interest rates could significantly affect sales activity and prices.
Still, the situation unfolding across Canada is undoubtedly fascinating to monitor.
What You Need To Know About the Brantford Housing Market
It looks like Brantford is joining other Canadian real estate markets with sales activity is slowing down, but it is still above the historical average.
According to the Brantford Regional Real Estate Association®, the number of residential property sales tumbled at an annualized pace of 9.8 per cent to 276 units in April. In the first four months of 2022, housing sales have slipped 2.2 per cent year-over-year.
While sales have fallen from the same time a year ago, housing transactions are more than 28 per cent above the five-year average and about 24 per cent above the decade average for the month of April – the most current data available at publishing.
So far, price growth has been strong in the Brantford real estate market. Association data show that the MLS® Home Price Index (HPI), which is considered a more reliable measurement than average or median price gauges, has risen 28.1 per cent year-over-year to $795,600.
On average, the price of homes sold in April climbed 24.2 per cent to $868,516. Moreover, the year-to-date average price rose 28.4 per cent to $898,733.
Here’s a breakdown on growth of the different types of residential properties, based on the benchmark measure, to kick off the second quarter:
- Single-Family Home: +26.4 per cent to $819,400
- Townhome: +39.1 per cent to $610,000
- Apartment: +55.3 per cent to $421,000
Association data confirm that inventory levels have also improved immensely during the busy spring buying season.
The number of new listings advanced at an annualized pace of 4.7 per cent in April, totalling 467 new units. This represented the most significant number of new listings added in the month of April in more than three decades.
Active residential listings also gained 22.4 per cent to 273 units.
On a historical level, new listings were 32.1 per cent above the five-year average and 43.2 per cent above the 10-year average for the month of April. Active listings were 18.1 per cent below the five-year average and more than 32 per cent below the 10-year average.
Another positive sign for the Brantford housing market is the months of inventory, which measures the number of months it would take to exhaust current supplies at the present rate of sales activity, rising to one month by the end of April, up from 0.7 months at the same time in 2021. This is still below the long-run average of 2.1 months.
According to the latest numbers from Canada Mortgage and Housing Corporation (CMHC), new housing construction has been mixed in the Brantford housing market. On the one hand, housing starts have declined 35.32 per cent in the first four months of 2022 compared to the same time a year ago. On the other, housing starts have soared 161 per cent year-over-year in April, totalling 94 units.
Affordability Crisis in Brantford?
In a recent housing affordability report by the Urban Reform Institute, Brantford was listed as one of the cities to experience “severely unaffordable housing.”
The overall study found that Canada had a median multiple ranking of 6.0, up from 4.4 before the coronavirus pandemic. Anything above 5.1 is defined as “severely unaffordable.”
“Severely unaffordable housing has spread from Vancouver to smaller markets, as Metro Vancouver has shed domestic migration to smaller markets in British Columbia, such as Chilliwack, the Fraser Valley, and Kelowna and markets on Vancouver Island,” the study stated. “Severely unaffordable housing has spread to smaller markets in Ontario, such as Kitchener-Waterloo, Brantford, London and Guelph, as residents of Metro Toronto seek lower costs of living.”
Many real estate experts hold that the primary solution to rising prices is more supply. However, with certain markets more regulated than others, industry observers warn that this could be difficult to achieve. Until then, the only affordable housing markets in Canada are Edmonton and Calgary, according to that same study.