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December 2022 Oakville real estate update

James Wheeler on Unsplash
James Wheeler on Unsplash

Oakville's residential real estate market update for December 2022 shows that prices have dropped since 2021. However, from a historical perspective, if you purchased a typical home in December 2019, the value increased by 48% in December 2022. That typical home sold for $910,000 in 2019, whereas in December 2022, it sold for $1.354 million.

The Bank of Canada did announce an increase of 0.5% on December 9, 2022, bringing the lending rate to 4.25%. Since December 2021, the bank's lending rate has increased by 4%. The bank's December did not increase the 5-year or 10-year fixed rates; they declined.

The federal bank uses the Consumer Price Index, which, as of November 2022, has increased year over year by 6.8% but declined a tenth of a point since October; this decrease, along with the outcry of Canadians, has led the Bank of Canada's Governor Tiff Macklem to indicate further rate hikes may not be needed. 

Macklem indicated in a speech to the Business Council of British Columbia that Canada's high inflation is caused by a worldwide supply chain issue which is taking longer to rebuild, combined with pent-up consumer demand and a shock to oil prices. To allow inventories to replenish, raising interest rates is the most effective way to curb demand.

However, Macklem may not have realized that the people living pay cheque to pay cheque are hardest hit by inflation, and with interest rates hikes, they are being hit twice. This is money that they can not afford to lose. 

GTA Update

Across the GTA, owners sold 3,117 (or 2,896 fewer properties) in December 2022 than in December 2021, a 48% decrease. Over the same period, GTA property values decreased by 9.2% to $1.05 million, down $106,621.

Oakville Update

During the last month, sellers in Oakville listed 144 properties and sold 93 properties. Available inventory expanded to 2 months.  

The average residential property sold for $1,449,722; a sale took 43 days, up four days from November. The days on the market (DOM) have decreased by over 22 since August 2022. 

Even with a decrease in activity and an increase in the number of days a property is listed, purchasers, on average, are paying 97% of the listed price, down 1% from November 2022. 

Year-over-year home prices

A typical residential property in Oakville is now going for $1,354,000, which has dropped by 11.59% since December 2021. An average detached home price is $1.740,500, down 12.11%.

But to provide some historical perspective, in December 2020, an average family home sold for $1.160 million. This shows that though 2022 was a bad year for real estate, in the past two years, real estate values have increased by 16.7%. In December 2019, the average house price was $910,000, so December's value is 48% higher.

An attached home is $1,133,600, down from 11.27% from a year ago, a townhouse will run you 11.73% less at $843,600, and a condominium apartment costs $625,000 - down 1.1% from last year. This is the first time apartment prices have decreased in the past several years. Apartment prices did not increase to the same extent as other types of residences in Oakville during the run-up of real estate prices.  

Milton realized the most significant price decrease for a residence in Halton Region. The typical Milton residential unit decreased to $1,004,200, a decline of 18.65%. It is the third hardest-hit community in the GTA.

Statistics for December 2022 Oakville residential real estate
Type Units Sold Median Price % LP to SP DOM
Detached 54 $1,632,500.00 98% 28
Semi-Detached 5 $1,050,000.00 97% 17
Link 0 $0.00 0% 0
Condo Apartment 14 $802,500.00 96% 45
Town House - Condo 10 $735,000.00 96% 28
Town House - Freehold 10 $1,035,000.00 97% 35

DOM - total days a property is for sale; % LP to SP - the percentage difference between the list price and the sold price.

According to RATESDOTCA, the best 5-year fixed-rate insured mortgage is 4.49%, which declined by 0.25% from the November real estate update. However, a 10-year fixed rate is available at 5.19%, down 0.15%

"Following a very strong start to the year, home sales trended lower in the spring and summer of 2022, as aggressive Bank of Canada interest rate hikes further hampered housing affordability. With no relief from the Office of Superintendent of Financial Institutions (OSFI) mortgage stress test or other mortgage lending guidelines including amortization periods, home selling prices adjusted downward to mitigate the impact of higher mortgage rates. However, home prices started levelling off in the late summer, suggesting the aggressive early market adjustment may be coming to an end," said new Toronto Regional Real Estate Board (TRREB) President Paul Baron.