Low interest rates, population growth, investment and unprecedented equity gains all combined to spark one of the strongest decades for price appreciation in Ontario’s six largest housing markets.
Between 2007 and 2017, the province’s six major housing markets experienced substantial growth despite some serious challenges that included a financial crisis and subsequent recession. RE/MAX found that housing values more than doubled in the 10-year period in the Greater Toronto Area and Hamilton-Burlington, while average price rose 81 per cent in Kitchener-Waterloo; 63 per cent in London-St. Thomas; 62 per cent in Windsor; and 44 per cent in Ottawa.
Retirees, empty nesters and relocating families in search of affordable housing have buoyed home-buying activity in Windsor-Essex in recent years. The city is one of few in Ontario where a person can still buy a single-detached home in the $100,000 range. As a result, strong demand and a limited supply of homes listed for sale continue to characterize Windsor-Essex’ resale housing market. Over the past decade, the average price of a home has increased 62 per cent—rising from $163,215 in 2007 to $264,750 in 2017—with a compounded rate of return of 4.96 per cent.
Population growth continues to accelerate, increasing at the fastest pace in the province between 2011 and 2016—up 3.1 per cent over the 1.3-per-cent decline in 2006 to 2011. According to the 2016 Census, the Windsor Census Metropolitan Area (CMA) also had one of the highest home-ownership rates in the country, sitting at 71.7 per cent. Economic fundamentals remain strong, led by a robust automotive industry. Numerous construction projects include a highway for the new Gordie Howe Bridge, Customs Plaza and new span for the Ambassador Bridge, with the federal government finally green-lighting a six-lane replacement.
New-home construction has also surged in recent years. However, inventory remains a serious issue with a shortage of homes reported in both the resale and new home markets. Demand for properties—especially those priced between $120,000 and $280,000—has been exceptionally brisk, with many homes selling at or above list price with multiple offers. Construction delays have also been reported in new home sales as a result of a shortage of skilled trades, which has contributed to the upswing in demand for resale product.
New businesses are opening, including fashionable new wineries, tasting bars and restaurants. Existing industries are diversifying, and there’s talk of Windsor becoming a transportation hub, given its close proximity to the US border. Warehousing is also a major topic of conversation.
It hasn’t all been smooth sailing. While residential real estate markets were challenged across the board in 2008, the impact of the looming recession was especially pronounced in Windsor-Essex. Against the backdrop of a faltering automotive industry, the average home price in Windsor-Essex hovered at $163,215 in 2007, falling short of that figure in 2008 and 2009, before bouncing back in 2010. Population figures declined 1.3 per cent between 2006 and 2011, and unemployment rates in Windsor-Essex were among the highest in Ontario. Sales during that period remained flat until 2010, gradually increasing until 2015 when the number of homes sold jumped 20 per cent or more for three consecutive years, in 2015, 2016 and 2017.
Employment opportunities and affordability will continue to draw homebuyers to Windsor from other parts of the province in the coming months. The number of homes sold is expected to hold relatively steady, while housing values are forecast to climb once again, albeit at a slower pace than in 2017.