Windsor Remains a Rental and Home Buying Bargain

Windsor remains a rental and home buying bargain for newcomers to Canada, despite home prices rising almost 37 percent from March 2021 to March 2022.

For example, as of March 2022, a one-bedroom apartment in Windsor, Canada's southernmost city, was rented for $1,152. A comparable one-bedroom in Toronto was rented for $2,023. That's a difference of almost $900 a month.

The average home sale price rose by $200,000

Meanwhile, despite the fact that the average home sales price in Windsor-Essex rose by almost $200,000 in one year Windsor remains one of the most affordable home-buying markets in the country. 

According to the Windsor-Essex County Association of Realtors (WECAR), the average price of homes sold in March 2022 was a record $712,837, an advance of 36.8 percent from March 2021.

WECAR also reported that the number of homes sold through their association totalled 812 units in March 2022. This represents a slight gain of 1.5 percent (12 sales) from March 2021. 

New sales set a record in March

It also marked a new sales record for the month of March in the Windsor market. The city in the western end of Ontario has a population of 229,660 and is the third-most populated city in Southwestern Ontario, after London and Kitchener.

"Home sales continued the trend of being well above average for this time of year, setting a new sales record in the month of March.," said WECAR president Elica Berry. "The number of newly listed properties during the month was also well above the historical average for March." 

The pandemic ushered in a housing surge 

In the years prior to the Covid-19 pandemic, Windsor's real estate market was definitely not soaring. Unemployment and a shrinking economic base saw many younger people leaving for larger urban areas, such as Toronto.

However, the advent of the work-from-home, work-from-anywhere lifestyle has allowed families and professionals to relocate to the Windsor area, lured by much cheaper housing prices (and no doubt Windsor's warmer climate!) Since then, the Windsor housing market has been on fire.

Still, housing prices remain well below places such as Toronto, the GTA, London, and Kitchener-Waterloo, making Windsor an affordable alternative for newcomers to Canada. 

2,500 new jobs coming to Windsor

And despite the recent interest rate hike (with more expected this year, the Windsor housing market remains solid

In addition, the labour market is strong. Stellantis and LG Energy Solution just announced plans to invest over $5 billion (Cdn) in a joint venture for the first large-scale lithium-ion battery production plant in Canada to be built in Windsor, which is located on the Detroit River, directly across from Detroit, Michigan.  The plant, when completed in 2024, will create an estimated 2,500 new jobs.

It was also announced recently that Amazon is to build a warehouse that is expected to be about 200,000 square feet and employ approximately 300 people. Construction on the project is scheduled to get underway in May.

Also, what impact Canada's ambitious immigration targets will have on Windsor's housing market going forward remains to be seen. 

With Canada looking to welcome 1.3 million newcomers over three years (while clearing an estimated backlog of 1.8 already approved newcomers) the demand for housing will only grow, and questions persist about this country's ability to meet that demand. Windsor remains one of the most affordable options in Ontario and Canada.

Newcomers are buying homes more quickly

A recent survey by Ipsos Public Affairs for the Toronto Regional Real Estate Board (TRREB) confirmed that newcomers to Canada are looking to buy their first new home faster than ever, the majority within their first five years of arriving. 

Meanwhile, in the first three months of 2022,  Windsor home sales totalled a record 1,907 units over the first three months of the year. This is up by 7.3 percent from the same period in 2021.

The big gain in new listings

The number of new listings saw a sizable gain of 20.1 percent from March 2021. There were 1,143 new residential listings in March 2022. This was the largest number of new listings added in the month of March in more than 15 years.

Months of inventory numbered 0.6 at the end of March 2022, unchanged from the 0.6 months recorded at the end of March 2021 and below the long-run average of 2.6 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

However, fewer homes were sold, according to CTVNews. WECAR reports that 698 residential properties were sold in March 2022. A year earlier, 735 homes were sold during the same time, resulting in a 5.03 percent decrease in the number of homes sold.

Home sales slid nationally

Nationally, home sales slid 5.4 percent between February and March 2022, according to the Canadian Real Estate Association (CREA). The decline puts activity back in line with where it had been since last fall. 

CREA said sales were down in about half of local markets in March, led by declines in the Greater Toronto Area (GTA) and Calgary.

While a welcome reprieve, we surely can’t describe the market as slow, as any declines leave activity at historically elevated levels - Farah Omran, Scotiabank

"Home sales (nationally) in March dropped relative to February," said Scotiabank Housing Economist Farah Omran in her monthly Canadian Housing Market Report, noting that it's "the first substantial decline since last summer when the market was coming off its March 2021 peak."

Home prices continued to rise in March

However, Omran points out, with fewer listings in March, home prices continued to increase, though at a much slower pace than the record price increases set in February.

"While a welcome reprieve, we surely can’t describe the market as slow, as any declines leave activity at historically elevated levels," she said. 

Short-term signs do seem to suggest that Canada's hot housing market is slowing. For example, the Bank of Canada again raised its benchmark interest rate, this time by half a percentage point to one percent,

Windsor housing costs are well below Toronto

Housing costs in Windsor are way below those of Toronto. According to the latest numbers from the Toronto Regional Real Estate Board, in Toronto proper, it will now cost buyers an average of $809,853 to buy a condo.

The latest Royal LePage House Price Survey released this month shows the average Greater Toronto Area (GTA) home price continued its upward trend through the first quarter of 2022, moving even further out of reach of the average resident.

GTA aggregate (all types) home prices increased by 27.7 percent year-over-year to $1,269,900 in just the first three months of the year, registering the highest single year-over-year gain since Royal LePage began tracking this figure.

House prices in the GTA continue to rise

The median price of a single-family detached home in the GTA increased 29.7 percent to $1,588,900.

In the GTA, since the start of 2022, single-family detached home prices inflated by 22.8 percent to $1,823,900.

 Royal LePage said it expects the aggregate price of a GTA home to jump by 16.5 percent year-over-year in the last three months of 2022.

Keeping an eye on market conditions

  "We have not seen this many newly listed properties in a single month since last summer. As a result, overall inventory rose off the recent lows. Make no mistake though, the current level of active listings is still unsustainable if we hope to move closer to a balanced market in our region,"  Elica Berry said.

She added: "We will be keeping a close eye on market conditions as interest rates rise in the coming months to determine what, if any, impact they may have on demand for the remainder of 2022."

Windsor is still a rental bargain

As mentioned above, Windsor remains an Ontario renter's bargain, particularly when compared with Toronto and the GTA and other cities in southern Ontario. 

A year-over-year analysis indicates that rental demand in Windsor has maintained an upward trajectory as markets stabilize and enter the annual leasing season, according to Rentsync's demand report.

But, the downside for renters is that supply is tightening. Windsor also attracts a significant number of international students attending the University of Windsor or St. Clair College. They also put the squeeze on an already tight market. 

"These conditions suggest that Canada has likely returned to its pre-covid leasing conditions, and the supply of available units continues to decrease at a higher relative rate than that of the demand for apartments." 

Windsor rental prices fell in March

The price of a two-bedroom is pegged at $1,535.

According to the same survey, the national average for a one-bedroom is $1,504 and $1,889 for a two-bedroom.

Rentals.ca in its monthly report puts the rent price of a one-bedroom in Windsor at $1,152, the lowest among the Ontario cities that it surveys. That's a drop of -6.95 percent from February 2022. and a drop of -10.22 percent from one year ago. 

Windsor continues to get immigrants moving to the area but it also is attracting people who can’t afford to live in other cities - Paul Danison

According to Zumper, the average rent for a 1-bedroom apartment in Windsor, ON is currently $1,275. This is a 16 percent ($175)  increase compared to the previous year.

Rentals.ca content director Paul Danison recently told The Windsor Star that although "Windsor continues to get immigrants moving to the area but it also is attracting people who can’t afford to live in other cities."

Related story: How to find rental accommodations for students in Canada. Click here.