With The Bank of Canada (BOC) increasing the key policy rate for the 8th time since March 2022 by 25 basis points to 4.5% on January 25th (the highest level in 15 years), The Canadian Central Bank indicated it would pause its hiking cycle IF economic conditions remain stable, as it pursues its goal of bringing decades-high inflation back to a target level of 2%.
The latest hike is essentially the limit of what some borrowers can handle, and The Bank appears to understand that. The end of the interest rate hikes signals good news for the housing market, and is giving borrowers hope. This is good news!
Here is a look at the housing market in Waterloo Region in January:
- The number of homes sold last month through the MLS System of the Waterloo Region Association of REALTORS totalled 297 units. This is a decrease of 41.9% compared to January 2022 and 31% below the previous 5-year average for the month.
- In January, the average sale price for all residential properties in Waterloo Region was $764,063. This represents a 20.1% decrease compared to January 2022 and a 5.9% increase compared to December 2022.
- On a monthly basis, we saw the average sale price increase across all property types in January. We also noticed more multiple offers happening, especially on detached homes that are priced under $800,000.
Total residential sales in January included:
- 176 detached (down 38.5% from January 2022). The average sale price of a detached home was $888,487. This represents a 21.5% decrease from January 2022 and an increase of 7.6% compared to December 2022.
- 61 townhouses (down 44.5% from January 2022). The average sale price for a townhouse was $625,831. This represents a 26.1% decrease from January 2022 and an increase of 2.2% compared to December 2022.
- 43 condominium units (down 48.2% from January 2022). The average sale price for an apartment-style condominium was $495,753. This represents a decrease of 9.3% from January 2022 and an increase of 6.1% compared to December 2022.
- 17 semi-detached homes (down 46.9% from January 2022). The average sale price for a semi was $650,588. This represents a decrease of 21.5% compared to January 2022 and an increase of 5.5% compared to December 2022.
There were 579 new listings added to the MLS System in Waterloo Region last month, a decrease of 13.3% compared to January of last year and a 28.7% decrease compared to the previous ten-year average for January.
The total number of homes available for sale in active status at the end of January was 651, an increase of 167.9% compared to January of last year and 34.7% below the previous ten-year average of 998 listings for January.
The number of months of inventory is up 233.3% compared to January of last year, but still historically low at one month. Between 2011 and 2015, January’s average months of inventory was 3.0 months. The number of months of inventory represents how long it would take to sell off current inventories at the current sales rate.
The average number of days to sell in January was 25, compared to 9 days in January 2022. The previous 5-year average is 21 days.
The demographic of buyers is also shifting as we observe fewer buyers coming from the GTA into the region. While there are still some, it is nowhere like it was last January.
If you have questions about this constantly evolving market, or are thinking of buying or selling now or at some point soon, contact us today to discuss.