Extremely Tight Supply in Durham Region Housing Market

Durham Region, located east of Toronto and the Regional Municipality of York, forms the east-end of the Greater Toronto Area and part of the Golden Horseshoe region. With a population just shy of 650,000 inhabitants, the Durham Region housing market is a less-dense alternative to the majority of other home-buying destinations across the GTA. In addition, the region has a strong agricultural backing, which means that a fair number of homes also boast more living space compared to other GTA properties.

Michael Watson, President of the Durham Region Association of REALTORS®, notes that the real estate market in the region has kept extremely busy over the past few months: “Durham Region’s spring market is still very busy with significant numbers reported each month. Durham is setting records for new listings and sales and remains a popular location for home buyers.”

Over the course of the last year, the pandemic has led many people to reconsider their lifestyle. Many have embraced remote work environments, which means working from home under the same roof as children who have pivoted to virtual learning scenarios. As a result of these changes, many families are feeling the crunch for space, and further, are no longer constrained by the need to live close to the office. This has driven hordes of prospective buyers to look for homes in the less expensive, surrounding GTA markets, and the Durham Region housing market has benefitted greatly from this influx.

Michael Watson states, “the housing market is a key economic driver and the demand for homeownership and the change in living habits has increased interest in surrounding GTA markets. The housing supply issue has been acknowledged by policymakers as an issue. It is important to address the shortage issue not only affordability, but as new trends show the increased demand for markets such as Durham Region.”

Tight Supply Creating Competitive Landscape in the Durham Region Housing Market

Continuing the trend witnessed in real estate markets across the rest of the province, Durham Region has experienced a strong uptick in sales volume and residential transactions during the first quarter of 2021. Heading into quarter two, it was expected this trend would continue. However, when comparing 2021 numbers to the same months in 2020, while there is a strong increase on a month-to-month basis during 2021, the number of transactions is slowing. During the month of April there were 1,771 residential transactions leading to a record-breaking year-over-year increase when compared to the same month in 2020. But, when compared to the previous month, March 2020, this represents a 15% decrease. Even with another month-to-month decrease, the month of May set yet another year-over-year record when the region reported 1,574 residential transactions over the month. This represents a notable 11.1% decrease compared to April 2021.

Following suit with the above trend, new listings in the Durham Region have also set year-over-year increases while simultaneously decreasing on a month-over-month basis. In April 2021, the Durham Region saw an impressive 2,336 new listings. While this is a substantial year-over-year increase when compared to 12 months ago, it is a sharp 18% decrease when compared to March 2021. Statistics from May 2021 followed along with the April trend of decreasing month-to-month. New listings in the region totalled 2,048 – an 80% increase compared to May 2020, but a 12% decrease when compared to April 2021.

The decrease in new listings has not been proportionate to the decrease in sales, which has led to homes not staying on the market very long and average prices soaring. Currently, an average home remains on the market for only 9.6 days. In May 2021, the average home in Durham Region sold for $902,135; mostly due to the competitiveness in the market and low borrowing costs across the country: “the demand for homeownership remains strong and the low borrowing costs continue to fuel the market,” said DRAR President Watson. “Listings are not staying on the market for long and housing supply needs to remain top of mind for policy makers. Supply cannot keep up with the demand and will continue to drive housing prices and competition between buyers.”

What’s on the Horizon for the Durham Region Housing Market?

As 2021 unfolds, it is expected that demand will outpace supply of Durham Region properties. While the market has cooled down slightly since the first quarter, it is still not out of the heat. With interest rates staying low for the foreseeable future and Ontario starting to loosen pandemic related restrictions, it is expected that the real estate market in the region will experience a strong summer, and this heated activity is projected to carry into the fall.