Record number of listings in Waterloo Region in May
Available properties for sale reached a new 10 year high across the Region, driven in part by low sales volumes in almost every sector. This increased availability is not a new thing mind you, as inventories have been gradually rising since mid 2022. We are now seeing the detached sector almost into neutral status, with semis much improved as well. The townhouse market remains balanced, albeit with slightly lowered levels compared to April. Apartment style condos are well into buyer territory with 8 months of available stock.
While listing have increased, our local market has seen a gradual but less pronounced reduction in sales volumes over the past few years. There’s still the usual increases in the busy spring and fall markets but the figures are at lower levels than usual compared to the 10 year average. These changes have improved selection considerably for buyers this spring.
Prices are down as well, but not markedly so. The bulk of the market, single detached, was down 1% on the month and 3% on the year. But housing is considerably more affordable this May compared to last year due to the combination of lower mortgage rates and prices. The numbers I’ve quoted below are using the mandatory stress test rate, and your actual figures will be lower. The average detached home last May had payments of $5567 with 200k down. An equivalent home now costs $4456 a month in comparison, that’s over 13k less per year in mortgage payments.
The big winner for buyers is apartment style condos, down 9% on the year. Changing investor sentiment and declining international student enrolment are big factors. This is not a Waterloo phenomenon either, the GTA market is lower for these properties too.
Regarding future prices, I’d expect that the sectors most commonly chosen by the investment community will be impacted the most. Regular homeowners have proved to be remarkably stubborn with regard to lowered expectations on prices. This is certainly a plausible reason for the high number of listings we have in combination with low sales volumes.
Lastly, the Bank of Canada held firm on its rate policy, leaving the overnight rate unchanged at 2.75%. This is certainly a cautious move that makes sense. There is a lot of craziness south of the border, with the recent Trump and Musk marriage seemingly on the rocks. Tariffs are very much a problem too, one that is certainly inflationary. On the other hand our employment numbers show that our economic situation is definitely slowing.
