Brampton is one of the hottest markets in Ontario and has seen large appreciation in the last year, similar to many of its neighbours in the GTA. The city of Brampton has proven to be one of the most popular suburbs of Toronto and its growth has been rapid for years. But what does the real estate forecast hold for Brampton in the future? Will house prices fall in the next year, or can investors sleep easy? We’ll answer these questions below.
Though Brampton is often lumped in with other nearby cities as simply the GTA, it has plenty of weight on its own. Brampton is the third-largest city in the GTA, after Toronto and Mississauga. It’s also the 9th most populous municipality in all of Canada. The city is home to almost 650,000 people and growing every year.
The average real estate price in the Brampton housing market is now above $1 million
Because of the close proximity of large population centres clustered in the GTA, these cities often have closely connected housing markets. Therefore, it should come as no surprise that Brampton has seen similar price growth in the past year as other cities in the region. If anything, cities like Brampton were hit especially hard with demand as many from the city of Toronto reevaluated their living situations and chose to move where more space could be had outside the more developed urban areas. In January of 2020, the average selling price across all housing segments in Brampton was around $760,000 according to the Brampton real estate board. By the end of that year, the rising prices had reached $970,000, and the price today is above $1 million dollars. This means the average home price has increased by over 40% in the last two years.
How does the Brampton housing market compare to other markets in the GTA?
When compared to average home prices across the GTA, Brampton is essentially in the middle of the pack. According to data obtained from the Toronto Regional Real Estate Board (TRREB), Brampton's average price is higher than that of areas like Toronto East and West, Ajax, Oshawa, and Mississauga. However, its average price is below areas like Oakville, Vaughan, Central Toronto, and others.
In terms of sales volume, when looking at the figures for November 2021, Brampton has the largest volume of home sales in the GTA outside of the city of Toronto, with over 820 sales happening that month alone, and over 11,000 year to date. New listings in Brampton are very close to the number of monthly sales, meaning supply is very low.
Detached houses are the most popular segment in the city, accounting for over half of all sales. The next largest segments are semi-detached and row housing. Condos are the smallest segment in the city. While Brampton sold far more detached homes than Mississauga, Brampton sold exactly half as many condos as the neighbouring city, and condo prices were lower.
What is the Brampton housing market outlook for 2021?
Reasons to predict a positive outlook
One reason that Brampton real estate market may hold up for a while yet is the fact that the GTA is simply always in high demand. As the busiest region in the country, there is almost no shortage of people looking to buy homes. Currently, there is still a lot of pent-up demand in the market that will take some time to dissipate, if it all.
There are also many people who can not afford homes, so are forced to rent, further increasing the demand from rental investors.
This area of the province is also one of the biggest magnets for population growth, both from within Ontario, other provinces in Canada, and international immigration. The number of new homes being built in the peel region has fallen since 2017, and there simply won't be enough housing supply built to offset the demand for them.
Reasons for potential price correction
There are other reasons however that housing prices may correct in the coming years. Prices dropping is only one potential outcome of a correction, prices may also just slow in growth or flatline. The Canadian Real Estate Association forecasts that sales will level out but still remain elevated from pre-pandemic conditions.
One big reason right now is the upcoming rise in mortgage rates. Many buyers are already racing to settle a home before rates go up, and as a result, real estate professionals are reporting steady sales despite what is usually a slow season. When rates go up loans become generally less affordable. If enough people are put off by high-interest rates, the growth of the average house price could slow down somewhat as a result.
Another reason the housing market in Brampton could slow is a return to normal economic conditions after the covid-19 pandemic. Though prices were increasing for years before the pandemic in the Canadian real estate market, the conditions it ushered in greatly increased the rate of growth.
With overvaluation and a lack of affordable housing, many are worried that things will eventually topple. The existence of a housing market bubble in Canada is pretty contentious, but it is something that you should at least consider the risks of before investing.
Should I invest in Brampton's housing market?
Ultimately, if you ask 10 economists their opinions on the housing outlook, you will get 12 answers. As with any investment, you should consider the risks and the market condition before buying any property.
That being said, if you plan on investing either way, there is no need to wait around for a better time. Though prices may level off in the coming years, there is still a good amount of time for appreciation until then.
Should I sell my home in Brampton?
The Brampton market continues to favour sellers currently. This means that you will have a much easier time getting the highest value for your home. However, the days of the covid housing frenzy where homes sold for far above asking price are largely now behind us. With that in mind, and potential price leveling the worst realistic scenario for the future, there is no rush to sell, but it isn't a bad time either. Though Brampton is far from the most expensive area in the GTA, there are many more areas beyond the GTA where the value of your Brampton home will go much further, should you choose to sell.