Barrie housing market update – Median sales price for residential houses in Barrie.
The Latest Trends, Predictions, and Tips for Buyers, Sellers, and Landlords.
In my latest update on the local housing market in Barrie, Ontario, and its surrounding areas, whether you are looking to buy, sell, or rent a property, this update will help you be more informed about the latest market trends and economic factors. In this blog post, we will discuss recent trends, market predictions, and provide actionable advice for potential buyers, sellers, and landlords.
Current Market Trends
As of the latest data, the real estate market in Barrie continues to show resilience given continued unstable economic activity.
- Home Prices: The median home price in Barrie right now is $695,000.
- This is trending downward but is very typical of the time of year
This chart shows the median price for residential properties in Barrie from July 2024 to December 2024.
The chart above shows median sales prices for the Barrie area dating back to January 2021 until November 2024. The arrows show the seasonal downward trend in the months of November, December, and January.
It is expected that prices will start to increase as we enter the spring market in 2025.
- Sales Volume: Although the market has improved in the context of unit sales, specifically there was an uptick in unit sales from October 2024 relative to October 2023, unit sales are still down when we look at metrics from the past 5 years.
The chart above shows unit sales for Barrie from January 2019 to November 2024. It is expected that with lower interest rates on the horizon, unit sales will pick up as we approach the spring 2025 market.
- Housing Inventory: Inventory relative to where it has been the previous few years is on the higher side. The city of Barrie is currently sitting around 3 months’ worth of inventory on the market.
Inventory levels have a significant impact on prices. The amount of inventory on the market right now is the highest we have experienced since brief periods in 2018 and 2019 and then you must go all the way back to 2011. In the Barrie area, it is more normal to have inventory levels in and around the 1 to 2 months’ worth. Months of inventory is a measure of how many months, given the current average rate of sales, it would take to sell all the current inventory from the market.
It is my estimation that we will see inventory levels start to decline as we head into the spring 2025 real estate market due to increased demand.
Inflation and Economic Factors
Inflation is a key concern as it directly impacts the Bank of Canada’s monetary policy. Here are some considerations:
- Inflation Impact: Higher inflation will lead to higher interest rates to try and combat the extra demand in the economy. The opposite is true with low inflation, this would lead to declining interest rates to try and act as a stimulus for the economy.
This chart shows the Consumer Price Index for Canada. It is interesting to note that the highest component of the CPI is housing and shelter which accounts for over 1% of the CPI measure.
If interest rates continue downward, this will make housing and shelter costs reduce, thus having a softening effect on CPI too.
- Interest Rate Decisions: The Bank of Canada will announce their decision on interest rates this coming Wednesday, December 11th where it is widely anticipated that they will again reduce interest rates. This will have a further impact on mortgage rates and borrowing costs.
With future rate announcements from the Bank of Canada in January, March, April, June and July, it is expected that they will continue to reduce the overnight rate to combat a declining economy.
What economic factors will impact these decisions? Unemployment continues to rise, now sitting in the neighbourhood of 6.8%.
This chart shown the Canadian unemployment rate from November 2023 to November 2024.
Those unemployed for greater than 6 months is on the rise and should be concerning for the Bank of Canada.
Another big story in the economy has been the pronounced population growth experienced as of late. This had largely been due in part to non-permanent residents. With recent changes made by the federal government to reduce the number of non-permanent residents, this will weigh on growth of the economy as the increased population has acted as a stimulus for our lagging economy. All of these non-permanent residents were buying consumables, buying, and renting housing and with a reduction to these measures this will put further pressure on Canada’s economy and the Bank of Canada will have to act.
- Mortgage Rates: Mortgage rates have held steady over the past few weeks given such volatility in the markets. With President Trump threatening tariff measures in Canada, this has the market trying to anticipate where rates will be headed as nobody really knows what will transpire.
This chart shows the difference between 5-year fixed rate mortgages and variable rate mortgage rates. Another factor that the Bank of Canada will be keeping a close eye on is the upcoming mortgage renewal cliff. The term “mortgage renewal cliff” refers to a considerable number of Canadian homeowners facing mortgage renewals at higher interest rates, which could lead to increased financial strain. Many homeowners signed mortgage commitments for mortgages in 2020 and 2021 when interest rates were at historic low levels. The concern is that many will not be able to afford their renewals which will be at higher interest rates. This is something the Bank of Canada will be taking into consideration when deciding on their upcoming interest rate decisions.
Market Predictions
Looking ahead, several factors are expected to influence the real estate market in Barrie:
- Price Increase: It is a normal trend to see prices increase in April, May and June as these are the most active months for real estate transactions but there are other factors that I feel will lead to increased demand, resulting in higher prices. Declining interest rates being the main catalyst.
- Interest Rates: The Bank of Canada’s upcoming decisions on interest rates will be pivotal. If rates decline as anticipated, this will make housing more affordable and increase demand causing prices to increase.
Tips for Buyers and Sellers
For Buyers:
- Get Pre-Approved: Secure a mortgage pre-approval to understand your budget and strengthen your position in negotiations.
- No Financing: If you have funds available for investment and do not require immediate financing, right now would be a great time to deploy that cash in an income producing asset. As rates continue to decline you can look to leverage the property in the coming months with a lower rate mortgage.
- Be Ready to Act: With higher inventory and reduced asking prices right now, it is a great time to make offers.
For Sellers:
- Price Competitively: Set a realistic price based on recent comparable sales to attract serious buyers.
- Enhance Curb Appeal: First impressions matter. Invest in minor upgrades and staging to make your property more appealing to stand out in an increased inventory marketplace.
The Rental Market
The rental market in Barrie also presents unique opportunities and challenges:
- Rental Demand: Demand for rental properties remains strong, driven by population growth and limited housing supply, but we have experienced a definite slowdown relative to what the rental market has been doing over the past few years. Asking rents have stabilized and the main factor right now continues to be screening and finding prospective tenants that can properly qualify.
- Rental Rates: Average rental rates have increased considerably over the past few years; this is what I am seeing in the marketplace right now for average rental units:
- 1 Bedroom = $1,600 to $2,000
- 2 Bedroom = $1,700 to $2,100
- 3 Bedroom = $1,900 to $2,400
- Townhouse = $2,600 to $2,900
*Note this is for average rental units. More luxurious apartments will command higher rents. The same can be said for lower-than-average apartments.
- Advice for Landlords: Ensure your rental property is well-maintained and shows very well. The rental market is changing and no longer will any rental unit attract quality renters. You need to ensure you have a clean and well-maintained rental unit or quality rental prospects will simply go elsewhere. This leads to my last tip, SCREEN, SCREEN, SCREEN. We get a ton of rental applications, and it is unfortunate but only a select few can qualify. With the economy being what it is and the Landlord Tenant rules in Ontario being what they are, it is critical that you properly screen to ensure a qualified tenant. Making a wrong mistake in tenant selection will cost you far more than another month of lost rental income.
Contact Jeff for more information on Buying or Selling real estate in Barrie and the surrounding area.
