The HPI benchmark price for Niagara rose by nearly $50,000 from January to February of this year. Local realtor association president Doug Rempel said that NIMBYism, helping maintain low supply, is partially to blame for the rapidly increasing prices. Photo credit: Reuters/Mark Blinch
Fueled by a dearth of existing inventory and a lack of new construction, housing prices in Niagara continue to soar.
Last month, the Home Price Index (HPI) benchmark price for the region rose by seven per cent compared to January 2022, going from $748,800 to $798,100.
The most unaffordable areas, with HPI prices over or nearing the $1 million mark, continue to be Niagara-on-the-Lake, Pelham, West Lincoln, and Lincoln.
The most affordable areas, with HPI prices in the low to mid $600,000 range, are Port Colborne/Wainfleet, Fort Erie, and Welland.
Calculated using a sophisticated statistical model that considers a home’s quantitative and qualitative features, the 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.
In a press release sent out last week, Niagara Association of Realtors president Doug Rempel highlighted some key takeaways from the province’s recently released task force report on housing affordability to help explain the rapid price increase.
“One of the most significant obstacles to increasing the housing supply is NIMBYism (not in my backyard). Neighbourhood pushback drags out the approval process, pushes up cost and discourages investment in housing – it also keeps out new residents.”
Echoing recommendations from the province’s affordability task force, Rempel said that setting aside NIMBYism is a necessary step to solving the housing supply shortage, and consequently slowing the rapid rise in prices.
“Ontarians want a solution to the housing crisis. We cannot continue to allow the opposition and politicization by the vocal 20 per cent (of people opposed to development) to prevent us from meeting the needs of all.”
Between February 2021 and February 2022, the HPI price for the whole of Niagara increased by 33 per cent, jumping $200,000 from $598,900 a year ago.
The average number of days on the market also significantly decreased from 20 days in 2021 to 14 in February 2022.
In total, 630 homes were sold in the Niagara Association of Realtors representative area last month, up from 454 in January.
The Bank of Canada raised its overnight interest rate by 0.25 per cent earlier this month in an initial attempt to tamp down inflation and cool the real estate market. It’s the first in an unknown number of hikes expected over the next 12 to 24 months.