2020 update:
Peterborough is HOT and for all of the right economic reasons. I will lay those out below but first let’s look by the numbers.
A look back to begin with; According the Canadian Real Estate Association, “The average price of a Peterborough home jumped to $416,011 in January (2019), up from $369,715 in December 2018.”
With that in mind let’s now look at what has occurred in the intervening year – Jan 2019 vs. Jan 2020.
Jan 2020 stats-
As you can see the Avg. sale price moved from $416,011 (2019) up to $460,826 (2020), an increase of nearly 11%, year-over-year.
There are no signs of this growth slowing any time soon due to simple supply and demand in the region, the new 407 extension and a diverse public, working and living in the City.
A look back at 2019 (as of Sept 2019):
Average (not “median”, as noted above) home prices in Peterborough city soared to another all-time high in September.
There were 267 residential sales in September, up 40.5 per cent from a year ago, the Peterborough and the Kawarthas Association of Realtors reported.
“Sales activity continued to climb in September, with buyers benefitting from more new listings in the last few months,” stated association president Cathy Burningham.
“That said, this trend will have to continue well into next year in order to get the market back into better balance. At the moment, even with these increases in new supply, there is enough demand out there to snap most of them up.”
There were 422 new residential listings in September, resulting in 768 active listings by the end of the month.
That’s a 16.2 per cent improvement in inventory over a year ago, but local listings remain well below average, as they have been since 2016.
At the current rate of sales activity, it would take 2.9 months to sell all of the listings, well below the 10-year average of 5.2 months for this time of year, the association reported.
There were 291 sales of all property types in September, up 36 per cent from a year ago.
Vacancy Rate:
Since we’re often discussing a rental property purchase, it is important to note the demand for rental units within the City (as well as the diverse economic drivers in Peterborough outlined in the next section.) The vacancy rate is represented as a percentage of unoccupied units from the total pool of available units.
With a rental property investment having above avg. vacancy can certainly lower your returns. In less desirable markets vacancy rates can be above 5%. Even though Peterborough is a smaller city in Ontario, it hovers at the avg., or even below as can be seen within the last 24 months.
From CMHC data (Oct. 2019): 2% vacancy in Peterborough
2% vacancy in Peterborough
Here is an article that touches on the vacancy rate: CLICK HERE
***Note that the article (and the CMHC) both highlight that a key to maintaining this vacancy balance is due to “The supply of units improving now that the city has introduced policies that allowed the construction of secondary suites within single-detached, semi-detached and row houses.” This is precisely the strategy that we employ in my investment company, Ontario Assets.
Peterborough’s diverse economy:
Who are the renters in this market and why are they in Peterborough?
Even with this growth, Peterborough still occupies an attractive price range for many first-time homeowners or investors. Rental yields are fantastic, combined with a low vacancy rate on units; investor clients are seeing terrific returns. All this to say, Peterborough has a lot of things going for it!
Peterborough benefits from having a diverse range of economic players: from established global companies to locally-grown. Unlike traditional manufacturing communities that tend to focus on one sector, Peterborough has long been a place where industrial, agricultural and cultural businesses cooperate, collaborate and flourish.
Total population of Peterborough was registered at 82,847 (2016) of the residents living directly in the City of Peterborough. The whole region is growing steadily at an 8% increase since 2001.
In December of 2019 the 407 super-highway connected with the main highway into the City. If the past proves true again, this will continue to have a fantastic upward push on property values, industry, population and rental rates near the 407 ETR.
Happy and prosperous investing, friends!