Sunday, Oct 2022

The Niagara region is no stranger to the piping-hot Canadian housing market, experiencing tremendous growth alongside the rest of the nation in recent years. Despite other concerns presented by members of the Niagara community, the 2019 federal election revealed that the main source of worry amongst Niagara residents stems from an immense shortage of housing[i]1.

According to the Canadian Real Estate Association (CREA), only 529 residential properties were listed in January of 2022 by the Niagara Association of REALTORS®­, as opposed to 616 in January of 20212. This statistic alone displays a clear lack of housing availability for Niagara residents, resulting in an obnoxious surge in market pricing by the effect of supply and demand.

Staggering increases have been recorded in recent years; according to statistics from the Niagara Association of REALTORS®­, year-over-year home prices from October 2021 to October 2022 increased by 33.5% in Niagara, for a monetary value of over $170,0003. Prices within Niagara Falls specifically rose slightly higher than the rest of the region with an increase of 34%4.

What’s causing the lack of supply?

Many factors have contributed to a lack of available housing in Niagara, with the most impactful due to living preferences of certain demographics. Recent trends studied by CREA have shown that the largest demographic of homeowners remains the baby boomer generation, limited to those born between 1946-19665. The Royal Society of Canada recorded that not only are baby boomers less inclined to leave their family homes, but 50% would rather renovate their current properties to accommodate their living needs than to relocate or move into typical assisted living accommodations6.

President of Niagara Association of REALTORS®, Doug Rempel, stated that “The fact of the matter is, (baby boomers) are equity strong, they are sort of bucking the historic trend and it takes a certain amount of inventory that would otherwise be in the market out of the market”7. This effect of boomer equity being tied-up in real estate endeavours contributes negatively to the problem, as it gives this generation more reason to stay where they are. Considering that baby boomers represent such a large demographic in Niagara’s population, this removes a significant amount of inventory from the home-buying pool.

Rempel stated that not only is there lack of supply from occupation by this demographic, but also due to mature equity investors from the Greater Toronto Area who see great opportunity in the Niagara region. Between proximity to Toronto and this area being a previously rather untapped market for investors, they are now, more than ever, inclined to flock for opportunity that has become fewer and further between in the GTA8.

Photo by Darren Clarke

 

Immense need for housing in Niagara

The intense lack of housing supply in the region, coupled with the impending crisis of unaffordability for most has left the Niagara community with little hope for the near future. This surge in pricing and lack of availability has caused more and more residents to turn to government-funded accommodations provided by Niagara Regional Housing. Dating back to late 2020, demand for this municipally-subsidized resource has increased staggeringly, leaving housing applicants to suffer through a wait-list of up to 18 years9. Wait time is dependent on many factors, with most aged 16-54 years old waiting up to 16 years for affordable housing in Welland or St. Catharine’s, up to 18 years in Niagara Falls, and still up to 13 years in Thorold, with similar wait times in other areas10.

Pressure on resources like these continues to increase, with Niagara Regional Housing receiving their largest ever recorded number of applicants last summer, with 7,700 people applying for rent-geared-to-income and low-income accommodations11. Unattainable prices are clearly having a massive effect on residents of the region, forcing them to join an already-large wait list to obtain rent costs that individuals can realistically cover.

Is there an end in sight?

Unfortunately, housing affordability is not expected to improve anytime soon; many experts are already speculating even higher increases throughout the remainder of 2022. Home price averages across Canada are set to increase at least 9.2 percent by the end of the year, meanwhile RE/MAX predicts the increase specifically in the Niagara region to reach 14% in the same period12. Experts believe that the only way prices can stabilize at more affordable levels would be from a significant increase in housing supply.

Need for new development is more serious than ever as Niagara residents wait impatiently for more options to become available. Luckily, local government is responding with $10.5 million dedicated to a new development to house individuals and families facing the possibility of homelessness, or that are currently in precarious living situations13. Projects like this one are so desperately needed to accommodate the overwhelming number of residents without affordable housing in the Niagara region, and hopefully more developers will increase supply soon.

 


1 Cheevers, Melinda. “Out of Reach: A Look at the Housing Situation in Niagara.” wellandtribune.com. Welland Tribune, October 15, 2021 | 2 “Niagara Association of Realtors®.” The Canadian Real Estate Association. The Canadian Real Estate Association, 2022. https://creastats.crea.ca/board/stca. | 3 Forsyth, Paul. “Niagara Housing Market Expected to Remain Hot in 2022.” thestar.com, December 7, 2021. https://www.thestar.com/local-niagara-falls/business/2021/12/07/niagara-housing-market-expected-to-remain-hot-in-2022.html?itm_source=parsely-api#:~:text=While%20average%20home%20prices%20are,by%20the%20local%20realty%20association. | 4 Ibid. | 5 “Niagara Association of Realtors®.” The Canadian Real Estate Association. The Canadian Real Estate Association, 2022. https://creastats.crea.ca/board/stca. | 6 Ibid. | 7 Nicolaou, Victoria. “Baby Boomers Staying Put as Niagara Real Estate Inventory Remains Low.” stcatharinesstandard.com, February 7, 2022. https://www.stcatharinesstandard.ca/news/niagara-region/2022/02/07/baby-boomers-staying-put-as-niagara-real-estate-inventory-continues-to-remain-low.html.  | 8 Ibid. | 9 Chandler, Justin. “Inside Niagara's Affordable-Housing Crisis.” TVO.org, November 12, 2020. https://www.tvo.org/article/inside-niagaras-affordable-housing-crisis. | 10 Ibid. | 11 Cheevers, Melinda. “Out of Reach: A Look at the Housing Situation in Niagara.” wellandtribune.com. Welland Tribune, October 15, 2021 | 12 Forsyth, Paul. “Niagara Housing Market Expected to Remain Hot in 2022.” thestar.com, December 7, 2021. https://www.thestar.com/local-niagara-falls/business/2021/12/07/niagara-housing-market-expected-to-remain-hot-in-2022.html?itm_source=parsely-api#:~:text=While%20average%20home%20prices%20are,by%20the%20local%20realty%20association. | 13 CMHC. “Canada Supports Rapid Housing Projects in Niagara Region .” CMHC, January 18, 2022. https://www.cmhc-schl.gc.ca/en/media-newsroom/news-releases/2022/canada-supports-rapid-housing-niagara-region.

 

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