January Housing Data
In case you’ve missed things, Ontario is experiencing one of the slowest markets in decades. We’re facing plenty of headwinds after years of very robust growth. Prices are falling, inventories are up. And for now, the situation for buyers is looking great. Here are the January numbers from my board for the Region.
So should we be worried about housing shortages in Waterloo Region too? Surprisingly enough, yes, when we look at things on a slightly longer time scale, given the Region of Waterloo is now facing an unprecedented water capacity crisis that will be years to fix.
Water Shortages
Development has now been frozen across much of the region due to shortages in the Mannheim service area. All of Waterloo and most of Kitchener are affected as well as a lot of the smaller communities in rural areas. While the freeze won’t affect units currently under construction, new permits are not currently being issued.
Waterloo Region staff came up with a preliminary rough estimate of 81 million dollars to fix our water supply crisis but Regional Chair Karen Redman has already bumped that figure, citing $90 million a few days back. A short term solution decided on by the Region on February 6th won’t be completed until 2027 and the timeline for a more permanent solution is unknown.
The Region is advising municipalities that “the region does not support approval for development applications at this time,” which obviously begs the question, when will new developments resume? Local builders, needless to say, are a little dismayed.
New and Resale Housing Supply
If you’re a buyer looking for a home to live in you’ll likely prefer freehold. According to CMHC, for December 2025, only 6% of the 6679 units currently under construction is either semi, town or detached. The bulk of housing currently being built is either purpose built rental apartment or apartment style condo.
The resale market is equally constrained in these exact segments. I’ve been saying for a while now that the downturn is somewhat investor driven and the data backs that up. Inventories for freehold properties while higher than before, are still in seller territory for semis and barely into neutral for detached and townhouses. Tightness in these sectors will provide freehold owners with a bit of a buffer in a down market like we have been seeing.
Conversely, the condo market will see increased downward pressure on prices as new rental properties come online. Developers will eventually curtail future builds if they are unable to sell the existing stock they have underway right now, regardless of the water issues I’d mentioned earlier.
Buyers Market
Nevertheless, if you’re a buyer, things are good here in Waterloo Region. We have seen year over year reductions in every segment except semis. Buyers have choice. Conditions are a thing again! And if you can’t afford freehold or really hate cutting the grass, condos are still an option.
How long will this last though is a matter of debate. The water crisis is a real problem for new builds. Shortages in the more desirable segments of our market are likely. And at some point, the market will turn. “When?” is the million dollar question.
