Once again, the region’s HPI composite benchmark fell by more than four points last month. Photo credit: The Canadian Press/Jonathan Hayward
Inflation, interest rate hikes, and uncertainty around the current and future state of Canada’s economy continue to chill what was once a red-hot housing market across much of the country throughout the latter half of the pandemic.
For the fifth time in a row, Niagara home prices fell on a month-over-month basis in August, following several successive price increases dating back to last summer.
Between July and August 2022, the local Housing Price Index (HPI) composite benchmark dipped by 4.1 per cent, going from $716,500 to $687,500. The month prior, the HPI fell by 4.9 per cent, and the month before that it dropped by 4.7 per cent.
Calculated using a sophisticated statistical model that considers a home’s quantitative and qualitative features, HPI provides a more stable price indicator than average prices, as it tracks changes to ‘middle-of-the-range’ or ‘typical’ homes and excludes extreme high-end and low-end properties.
Last month’s HPI was a mere 4.4 per cent above August 2021, as the local year-over-year HPI nears parity.
“The market is continuing to shift while buyers are in better positions to purchase their homes,” Niagara Association of Realtors (NAR) president Jim Brown said in a press release last week. “The financial information available suggests residential prices will drop in the near future as well.”
From Welland to West Lincoln, every municipality in the NAR service area experienced a price drop last month.
In Niagara’s largest municipality, St. Catharines, the HPI benchmark fell by 4 per cent from $643,400 in July to $617,900 in August. The month prior it fell by 5.7 per cent.
In Niagara Falls, where prices most closely approximate the average HPI across the region at large, prices dropped 5.1 per cent from $713,900 to $677,400.
After experiencing fairly significant dips of 7.2 and 4.2 per cent in June and July, respectively, Niagara’s most affordable market, Welland, saw its month-over-month HPI price effectively flatline. Prices in the central Niagara city dropped a mere 0.7 per cent from $577,900 to $573,700.
Niagara’s least affordable place to purchase property, Niagara-on-the-Lake, saw its HPI fall by 6.3 cent down to $1,143,100. The town remains the only locality in the region with an HPI above $1 million.
At 5.8 per cent, Lincoln saw the second largest drop after Niagara-on-the-Lake.
In West Lincoln and Thorold, the HPI fell by 4.5 and 3.7 per cent, respectively, while Fonthill/Pelham, Fort Erie, and Port Colborne/Wainfleet all saw more modest month-over-month dips in price.
In total, 457 residential properties exchanged hands in August, up 24 per cent from July, levelling back off to June’s levels.
The average number of days on the market remained constant at 31. The number of new listings was 1,095.
The HPI composite benchmark property for Niagara is currently a 1,276 square foot single detached home between 51 to 99 years old with three bedrooms, two bathrooms, forced air, natural gas and on municipal sewers.
The Niagara Association of Realtors service area excludes Grimsby and certain parts of West Lincoln. Those locations are included in statistics provided by the Realtors Association of Hamilton-Burlington.