EDITOR'S NOTE: A version of this article originally appeared on SooToday on Sept. 28. It is being republished here for readers who may have missed it.
The cost of a single-family home has continued rise over the past six months in Sault Ste. Marie, mirroring a trend of increasing housing prices right across Ontario.
According to the latest data from the Canadian Real Estate Association (CREA), the average cost of a single-family dwelling in the Sault swelled to $293,400 in August — an increase of $31,000 from February 2023.
It’s also nearing the high-water mark for the price of a single-family home during the COVID-19 pandemic, which was $303,200 in April of last year.
But according to a separate report from Zoocasa, the Sault still remains the most affordable city in the province to buy a home, ahead of North Bay ($402,000) and Sudbury ($450,900).
Sault Ste. Marie Real Estate Board President Tiffany Rogers says the increase in prices reflects a trend of rising housing costs in Ontario. Data from CREA shows the average price for a single-family home in Ontario jumped to $1,013,400 last month. Before prices began climbing this past March, the average price for a home in the province was just over $920,000.
“We’re keeping up with that slight increase, but it’s still pretty affordable for most people if they’re moving to northern Ontario,” said Rogers. “We’re holding fairly well with prices, and it’s still fairly affordable for people.”
Rogers says the steady climb in prices reflect the current housing shortage in Ontario. In Sault Ste. Marie, a report from the city's planning department presented to city council over the summer suggests the city needs 3,115 new housing units over the next 13 years to accommodate an anticipated population growth of more than 8,400 people.
An estimated 779 new units are needed over the next three years alone.
Among the new residential units needed are up to 1,160 apartments, and between 1,955 and 2,265 single-detached, semi-detached, or row houses.
Rogers believes that rising interest rates could play a role in the local housing market over the next year.
Statistics Canada released its latest inflation reading last week, which shows the annual rate rose to four per cent in August, up from 3.3 per cent in July.
The Bank of Canada is slated to make its next interest rate decision on Oct. 25 — a decision economists say just got tougher with inflation rising over the past two months.
And that will no doubt be a factor for would-be home buyers, says the head of the Sault’s real estate board.
“Interest rates do play a big role for people — whether they’re going to sit tight, whether they’re going to wait things out,” said Rogers. “I don’t foresee that interest rates are going to be dropping drastically anytime soon, so I think once people get over that hump of, okay, this is what the interest rates are, this is what we’ve got to play with for the next few years moving forward, then they can better ascertain what they’re going to do.”
A new report by Re/Max Canada, however, predicts the country's real estate market will soften this fall with average home prices predicted to remain flat as the housing market deals with high interest rates and a lack of homes for sale.
- with files from The Canadian Press and Alex Flood
