Kingston Housing Market Canada’s Hottest?

A year ago, the Kingston housing market was one of the hottest in Ontario and the rest of the country. The small municipality, about two hours outside the city of Toronto, had shown impressive performance over the last couple of years. In line with the trend, many smaller housing markets have turned their fortunes around on a Canadian dime and recorded notable gains.

Is it still sizzling these days? Surprisingly, it has experienced quite a cool down. But is it still showing signs of life?

Let’s explore some of the latest numbers that help showcase this regional market’s strength.

What You Need to Know About the Kingston Housing Market

New data from the Kingston and Area Real Estate Association (KAREA) show that the number of residential property sales declined nearly nine per cent year-over-year in December, totalling a little more than 100 units. Last year, home sales plunged close to 17 per cent, with roughly 2,500 units exchanging hands.

Historically, home sales were about 32 per cent below the five- and ten-year averages for the month of December.

Although sales activity slumped at a considerable pace, price growth still enjoyed modest gains. Real estate association statistics revealed that the Home Price Index HPI), which is considered a more reliable measurement than average or median price gauges, rose at an annualized pace of 2.7 per cent to $544,500. At the same time, the average sales price of homes sold in the Kingston housing market fell approximately five per cent year-over-year to below $546,000. Additionally, the annual average price plummeted more than seven per cent to $609,198.

Here is a breakdown of how different properties performed to close out 2023:

• Single-Family Homes: +3.4 per cent to $557,100
• Townhome: -2.7 per cent to $510,000
• Apartments: -0.03 per cent to $430,200

“With sales activity remaining subdued through 2023, it was little surprise that annual totals came in at their lowest in more than 25 years, as the majority of would-be buyers stepped back to the sidelines in response to higher interest rates,” said Stacey MacDonald, President of the Kingston and Area Real Estate Association, in a statement “We ended the year on a more positive note, with home sales showing some signs of life compared to the previous several months. However, it will likely take another quarter of rates being on hold, or even a hint from the Bank of Canada that rate cuts may be on the horizon before buyers regain enough confidence to return to the market in significant numbers.”

Meanwhile, industry experts are paying close attention to supply trends in the Kingston real estate market.

In December, the number of new residential listings tumbled by 7.2 per cent year-over-year to 141 units. Active listings rocketed nearly 34 per cent from the end of December 2022 to 573 units.

On a historical basis, new listings were roughly seven per cent below the five-year average, and active listings were more than 59 per cent above the five-year average for this time of the year.

Months of inventory, which measures the number of months it would take to exhaust present inventories at the current rate of sales activity, surged to 5.6 in December. Compared to the same time in the previous year, it was 3.8 months. Plus, it was above the long-run average of 4.5 months.

In addition, new housing construction activity picked up immense steam throughout 2023. According to the Canada Mortgage and Housing Corporation (CMHC), housing starts more than doubled to 1,368 units in the first 11 months of 2023.

So, how does this compare with the rest of Canada’s most populous province?

Here is a brief summary using housing data from the Ontario Real Estate Association (OREA): residential sales activity rose 2.4 per cent year-over-year to 7,723 units, and the average price of resale residential homes province-wide jumped more than five per cent to $853,915.

Is Kingston Canada’s Hottest Housing Market?

For a population of approximately 136,000, Kington is doing moderately well in the Ontario real estate market.

According to the RE/MAX 2024 Housing Market Outlook report, the Kingston real estate market is expected to see average prices rise 4.5 per cent in the upcoming year to $652,647. This will be fueled by a ten per cent increase in sales activity.

What is supporting this red-hot market? Buyers who live outside the region, many of them coming from Toronto. With North America’s fourth-largest city becoming too expensive for many young families and professionals (despite exceptional incomes!), many of these households are reconsidering where they live.

Over the last couple of years, many have chosen to leave major urban centres in favour of smaller towns in the province of Ontario and other regions across the country. Plus, considering that Kingston has been labelled a buyer’s market, what better time would there be to acquire a home in this small Ontario town?

And who would not love Kingston anyway? The terrific waterfront scenery, a two-hour distance to Toronto, and remarkable homes on the open market are just some of the reasons why Kingston has become the go-to destination for prospective homeowners across the province.