Though most of Canada’s real estate markets are currently rebounding from last year, with prices inching upwards, they are still experiencing year-over-year declines in average price. However, the Waterloo Region real estate market stands out as one of the few markets experiencing both year-over-year price and sales growth.
According to the Waterloo Region Association of Realtors, the benchmark price for Waterloo Region in June 2023 was $839,869 – a 6.4% increase from June 2022. Detached homes, townhouses, and condo sales were similarly up by 5.9%, 4.9%, and 22.9% respectively. So how has buyer behaviour changed since last year and what is keeping this market on an upward climb? We talked with Sharon Forbes, a Zoocasa Sales Representative for the Waterloo Region, about her insights and experience with this market.
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Market Conditions in Summer 2022:
The first interest rate hike of 2022 was in March and this left many prospective buyers, especially first-time homebuyers, hesitant to enter a fluctuating market. “In the summer of 2022, the major players were investors and people who knew they didn’t have to go back to work,” said Sharon. “People had a lot of money in their pocket still and many investors knew Kitchener-Waterloo was a good place to invest because of all the great universities here.”
A detached home in Waterloo Region in June 2022 was $920,349, which although still high, was a substantial 9.5% drop from June 2021, and this decline helped drive detached home sales. “Last year, buyers were hunting for detached and multi-generational homes with finished basements that they could rent out. People wanted to get help with their mortgages because prices were still a bit high, so detached properties were definitely the hottest back in June 2022,” explained Sharon.
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Market Conditions in Summer 2023:
With the anticipation of interest rate hikes now an accustomed norm and confidence in the market restored, first-time home buyers have entered the market. “The biggest players now are definitely first-time homebuyers. In June 2022, they were scared because of rising interest rates and high prices, but now they’re coming off the sidelines and they see an opportunity to build wealth in real estate,” said Sharon.
Though previously detached homes were the standout property type, condos have entered center stage. “Condos are selling like hotcakes,” said Sharon. “This may be because condos have seen the highest year-over-year price drop and so this is allowing first-time buyers a way into the market. Rather than looking at buying their forever home, many first-time buyers are just trying to get into the market and condos offer that.”
Detached homes and townhouses both experienced year-over-year price increases, but the average price of a condo dropped by 6.2% from last year to $470,163. In Kitchener-Waterloo specifically, the price of a condo declined year-over-year by 8.7%, and in Cambridge by 16.6%.
Also helping to attract first-time homebuyers is the Affordable Homeownership Program in Waterloo Region which provides a 5% loan on a downpayment for qualified buyers. “Waterloo Region as a whole is growing because people are realizing that they can get more bang for their buck here,” said Sharon.
Hot Places to Buy
According to Sharon, Hespeler in Cambridge is a trending spot to buy in thanks to its proximity to several amenities including the highway. Though more people move to Kitchener-Waterloo, Cambridge is an attractive option for those who love architecture and walking trails. “There are always films being made in Cambridge because of the architecture,” noted Sharon.
In Kitchener, Doon South is a popular neighbourhood because its close to a college and offers a lot of investment potential, and Uptown Waterloo is another area that has always been popular for buyers seeking a downtown life.
If you’re considering a move to the Waterloo area, let us help! Contact us today to speak with a trusted realtor about the home-buying process and your real estate goals.