This Ontario city has the most overvalued real estate market in Canada
Good luck buying a home anywhere in Ontario right now, as meteoric price gains and a historic inflation spike push housing markets in the province further out of reach.
And as bad as things are in the Greater Toronto Area in 2022, rampant speculation is not limited to urban centres. According to one housing market assessment, Peterborough is now the single most overvalued housing market in the entire country.
Moody's Analytics has ranked Peterborough, Ontario, at the top of the list for most overvalued housing markets in the company's fourth-quarter assessment of housing price valuations in Canada.
Peterborough's 107.8 per cent valuation comes after years of substantial price growth for the municipality northeast of Toronto.
Though with an average annual household income of about $70,000 and the average May 2022 selling price climbing nearly 19.8 per cent to $836,843, the city's market is firmly on the unattainable side of the scale.
According to RE/MAX Canada's analysis of the valuation, recent activity "has first-time homebuyers priced out of the market, especially local buyers," adding that "too many prospective homebuyers are still stuck waiting to achieve the dream of home ownership."
Experts attribute Peterborough's valuation to factors like rampant investor speculation, blind bidding, and low interest rates.
Despite all the doom and gloom, home sales took a nosedive in the region in May, sales falling at an annualized rate of 34.3 per cent with a year-over-year decline of 18 per cent and a 17.7 per cent dip below the ten-year average.
Though May home prices leapt significantly in May, this downturn in demand could soon translate to decreasing value.
A spike in supply could further ease conditions, though Kate Kidd, President of the Peterborough and the Kawarthas Association of Realtors, says "it's going to take more than a few months of stronger supply to have any meaningful impact on the market balance in the long term."
After Peterborough, Canada's second most overvalued housing market was also found not too far from Toronto, with St. Catharines-Niagara's market valued at 106.9 per cent.
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