Brampton’s Housing Market in 2022: What you need to know

Brampton has become one of the most expensive suburban communities in Ontario. And it’s only getting hotter. Experts think this won’t change anytime soon and predict that residential prices will continue to rise at an exponential rate. Investors are rejoicing at this news- but will things stay hot forever?

About Brampton.

What does Brampton mean? According to the latest census, it is the third largest city in Ontario and ninth-largest municipality in all of Canada. With a population of just over 649,000 people – this small town has grown quickly from what was once nothing but farmland. And despite being considered a suburb of Toronto, its growth shows no signs of slowing down anytime soon.

After setting new benchmarks for five consecutive months, this continued trend was evident yet again in January 2022 when Brampton set another new benchmark – now home prices are soaring. It doesn’t stop there though; the average selling price of homes sold in Brampton reached $1,367,444 – a 41% increase from last year and making it one of the most expensive housing markets in Canada. One more thing worth mentioning is that this is six consecutive months where they’ve broken all-time home price records.

However, detached houses comprise a higher percentage of the housing market in Brampton in comparison with Metro Vancouver and Toronto. The distribution of properties in each city plays a significant part in the overall average of price of homes. Condos, with lower average prices, comprised 36 percent in the Greater Toronto’s real estate market however only 6% of Brampton’s residential market at the beginning of 2022.

Examining specific types of property in the month of January, 2022 detached houses have the highest year-over-year increase, rising 41.4 percent over last year, and 13.4 percent compared to the previous month. The average price for selling a detached house in Brampton is currently $1,652,088, which is a record. This means that the median cost of a detached house has increased by $484,020 in the past year and $1953,325 over the last month.

The gains in annual prices of other types of property were also significant. Semi-detached houses had a 40 percent increase in year-over-year value and a 10% increase per month in the average price, whereas condo townhouses experienced an 42.5 percentage increase from year to year, and an increase of 9 percent per month in the average price. Freehold townhouses saw an increase of 38% in price year-over-year, and an 11.4 percentage monthly increase and condo apartments lag behind , with a cost increase by 30% year-over-year.

In analyzing average prices for sold for January 2022, we can see that the average sold price for a semi-detached house located in Brampton was $1,230,275. Freehold townhouses costing $1,129,851, condominium townhouses priced at $873,098, and condos with a price of $622,579.

Semi-detached homes were the sole type of property in Brampton that saw a year-over-year rise in sales. Sales of semi-detached homes increased by four percent over the course of the year to the 124th sales of January in 2022. While detached home sales fell by 21% year-over year to 313 sales. Freehold townhouse sales fell by 30% over the course of the year to 74 sales. Condo townhouse sales dropped 27% over the course of the year at 53 transactions, and condominium apartment sales dropped 24% from year-to-year, up to 38 units.

The supply of homes is still the main topic in Brampton’s real estate market, as inventory continues to decrease this month. In January 2022, there were 832 listings January 2022. This is lower by 13% from 961 listings added for January 2021. The 255 active listings as of the end of January 2022 is the 31.6 percent decrease year-over-year. The inventory of Brampton’s market for housing has decreased to 0.6 months, which makes one of the smallest of the GTA. The average price sold for homes located in Brampton is 15% higher than the median price of listing due to the fact that the average number of days on the market decreased to six days.

With homes sold within an hour and at 15% more than the price of listing The month of January 2022 proved to be a progressively competitive market Brampton buyers continue to battle for a smaller number of homes.

5 Tips for Buying an Investment Property

If you’re considering buying an investment property, there are several things to keep in mind before you commit to the purchase. The key to your success with the property will be researching and planning to know what factors will affect the house’s value and how much of your time and money you’ll need to put into it to maintain its value over time. Here are five essential things to consider before investing in a property. If any of these crucial things don’t make sense to you, or if you find them too complicated, be sure to talk with an expert who can help guide you through the process.

1. Risk in Real estate investing.

Real estate investing is a lower-risk option than other investments, such as stocks or cryptocurrencies. To assess the risks involved, it is essential to thoroughly research the property, the area, the appreciation over time, and future plans. You should also consider operating, mortgage, and maintenance costs when investing in property. 

2. Your Financial Situation

Before you consider investing in property, It is essential to assess your financial situation. These investments are not cheap, so be prepared to invest substantial money upfront and over time if you have to mortgage. When determining your financial situation, consider your income to debt ratio. This could make a difference in whether you can use your existing funds for the investment or not. Consider how much cash you have available after the acquisition. This can help with closing costs and emergency fund requirements.

3. Property Management

Depending on the type and size of your property, you might need management services to maintain it operational after you have bought it. It is wise to hire a property manager to manage your rental property. They can find tenants, handle legalities, and maintain the property. This will take the burden off your shoulders and allow you to concentrate on other investments and personal ventures.

4. Property location

The “where” is much more important than “what” when investing in property. Property prices heavily depend on the location of the property. The property price in urban areas will always be higher than those in rural and suburban locations. The high cost of living in urban areas will result in higher long-term profits. Because of the ease of access to transportation and social factors, urban lifestyles are often more appealing to the masses. Once you have purchased the property, the property’s location will be determined by who your target audience is. If you plan to rent your property out to families, you might consider buying a property in Brampton and Mississauga, the best places to purchase real estate in Ontario.

5. The One Percent Rule

The real estate’s one percent rule states that the monthly rent should not be less than 1% of the property’s price. Your property rent should cover your monthly mortgage payments. This ensures that you don’t invest your income in the mortgage but rent the property. This is what will make renting a rental property worth the investment.

Why is Housing Supply So Low in Ontario?

There are some reasons to be optimism given that housing starts increased dramatically in 2021 in the same year, and the efforts around the nation to tackle the shortage of housing are increasing. In spite of these encouraging signs, we remain convinced that the housing shortage in relation to the needs of the population will continue to exert upward pressure on rents and prices and lower the affordability of housing. There is still a lot to be done by policymakers to close the gap in housing.

  • The housing stock in Canada that is adjusted to population is the lowest among the G7.
  • Results differ by provinces within Canada and Canada, and Alberta, Manitoba and Ontario having the lowest numbers of homes per person compared the others provinces.
  • Ontario would require more than 650,000 homes to bring its dwellings-to- people to be equal to all of nation

It’s no secret that people who want to buy homes are struggling to find one they can afford. In fact, even people who qualify for loans may still struggle because there aren’t enough houses to choose from! With so few choices, bidding wars are inevitable, making things even more difficult for buyers. So why does the housing market have such little selection? There are a few different reasons Why is Housing Supply So Low in Ontario?

housing market canada
Source: Scotiabank

Too many studio and one-bedroom condos

When it comes time to purchase homes in Canada, most Canadians prefer townhouses, semis, and detached homes. They are large and can enjoy a front lawn and a backyard. Although condos do not offer additional outdoor space but they are larger to allow for families. But, the majority of condos in the GTA are built to be used as investment properties. Developers target investors who are able to purchase multiple units at once, and later lease them to young professionals and students.

A family of three or more people can’t reside in a small 400 square foot condominium with a walled kitchen and no private space. The older condos located in Mississauga with more than 1,200 square feet are an ideal option, and there are plenty of families who live there. If you come across an old condo available for auction in Mississauga and you are able to purchase it, do so since it’s the best value for your money!

New Home Construction Fell in the back for a few years

The construction of new homes in single-family houses in the last five decades, and includes the average of long-term housing units built. Builders surpassed that average during the time of the housing bubble. This led to an oversupply of houses on the market, and the value of homes fell. This was among the reasons that led to the housing market crash in 2008.

The rate of construction for new homes has slowed. In the past 13 consecutive years, builders weren’t capable of building enough homes to match what was the average. This underbuilding has left us with an inventory deficit of multiple years that could turn into the epidemic.

The Pandemic’s Impact on the Housing Market

When the pandemic struck the country, it brought a new admiration and renewed appreciation for the importance of the home. The need for a secure place to work, live or study in, as well as exercise was even more crucial for Canadian all over the country. Therefore, when mortgage rates fell to less than 2%, buyers were eagerly entering the market to take advantage of these low rates to secure homes that could meet their ever-changing demands. In the meantime, sellers were reluctant to put their homes for sale as fears regarding the pandemic grew.

Lower mortgage rates

Bank of Canada dropped the mortgage rate from 5 percent to under 2 percent, which led to numerous Canadians to purchase homes. People who are looking to buy homes benefit from record-low rates of interest. The demand grew overnight, but the supply didn’t. The first houses sold at $300k to $400k more than the asking price. Many who did not desire to buy a house considered buying a panic house, believing that the prices would rise more.

Market Report Summary for January 2022

  • Average home prices in Ontario have increased by 25.6% in a year to $998,629
  • Toronto home prices increased by 24% year-over-year to $1.07M
  • Ottawa home prices increased by 15% year-over-year to $677k
  • Mississauga home prices increased by 30% year-over-year to $1.15M
  • Brampton home prices increased by 41% year-over-year to $1.37M
  • Hamilton home prices increased by 35% year-over-year to $976k

Here’s the thing: there are less houses on the market, and this is having a huge effect all across Canada. In fact, inventories are lower than ever before and if you’re thinking about buying in Central Ontario or anywhere else in the country – take notice!

If you are looking for property, there is no better time than now! Housing prices are skyrocketing due to limited supply. Low inventory means that this trend will continue over the next few years, so don’t wait too long!

For more information, please contact me at parveen@teamarora.com or +1 (416) 910-8923.

 

Mississauga Location

268 Derry Rd W Unit 101, Mississauga, ON L5W 0H6

Brampton Location

2 County Court Blvd #150, Brampton, ON, L6W 3W8