Housing prices continued to move upwards in almost every segment across Waterloo Region this June. Low inventories and strong buyer demand are bolstering valuations despite the high interest rates we’ve seen over the last year and a bit.
Apartment style condos is the only property class that has remained relatively flat relative to the lows seen at the end of 2022. Semis, townhouses and detached properties are up substantially in comparison to the early winter months.
Prices have fully recovered on a year over year basis, with the exception of apartment style condos, down 6%. Semis and town-homes are more or less even. Detached prices are once again on the rise, a full 10% higher than last June’s, and once more averaging over 1 million dollars here in Waterloo Region.
Inventory levels are a big factor. While the 1061 properties sold in June is roughly in line with the 5 year average, it is also only 72% of the 10 year average. Looking back into the early 20-teens we see June inventory figures typically 2.5 times higher than when we saw this year.
Buyer demand continues to be an issue. Letting well over one million people immigrate to Canada in a single year is simply too much. We don’t have the infrastructure or housing stock for that kind of population growth. The temporary foreign worker program needs to be drastically cut back or even eliminated.
Inter-generational wealth transfers from parents (and grandparents) to adult children looking to buy is adding additional pressure on prices. I’ve had several deals in the past few years where this has been the case. My colleagues are also seeing this trend.
As I’ve mentioned on occasion a sharp economic downturn is always a risk to property values. But it’s a fool’s game trying to predict when one will occur. It’s equally hard to know what house prices or the stock market will do in the short term. In Waterloo Region we have seen falling property values only a few times over the past 25 years.
Here’s the full press release from the Waterloo Region Association of Realtors.