The summer is traditionally one of the slower times for real estate. Many buyers and sellers travel and take time to be outdoors during the warmer months causing property sales to decline or level off.
This summer, the Barrie condominium market followed a more traditional trend than in previous years and was quite slow.
The primary reason for the market slowing down this summer was due to the multiple rate hikes that the Bank of Canada implemented during the third quarter (Q3-2023) in the attempt to control inflation. Many buyers decided to put their search on hold to see how the market was going to respond causing there to be little to no urgency from buyers, especially those looking for condos over $600,000.
Over July and August, appointments booked on properties were down and the average days on market to sell grew. This caused many sellers to adjust their expectations.
In August, there were a total of 26 condo apartments that sold in Barrie, with an average sale price of $483,962. This was the lowest recorded average sale price for this condo type since January of this year, but it is not a cause for concern. The reason behind this is the majority of the units that were sold last month were under $500,000 which pulled the average sale price down.
This does not come as a huge surprise as the demand for entry level properties increased when interest rates began to rise.
In recent months, first-time buyers have been racing against the clock to buy a home before their pre-approvals expire with their lender. If they do not close prior to their rate hold expiring, they would be required to go through the pre-approval process again.
And if interest rates were to rise again, they would be faced with a higher rate of borrowing that could negatively impact their budget.
The condo-townhouse market in Barrie did not change much from July. The average sale price last month was $498,980 and units were taking an average of 44 days to sell. Although the average sale price dropped since June, this part of the condo market was still quite active with units selling for 99 per cent of the original asking price.
If prices in the freehold housing market come down this fall, there could be a shift in the demand for condo townhouses as buyers could potentially move their search into the freehold market to avoid paying monthly condo fees.
It is said that the Bank of Canada will hold its policy interest rate at five per cent and the prime rate at 7.2 per cent for the remainder of 2023. If that does in fact happen, we might see demand start to increase again. Buyers and sellers tend to feel more comfort trading real estate when market conditions are more predictable.
There are currently a total of 100 condominiums for sale in Barrie, including 82 condo apartments and 18 condo townhouses.