When it comes to detached homes, the average sale price hit $920,349 in June, the first time it’s fallen below $1 million since November 2021.
Home sales also continue to slow, 561 homes were sold through KWAR’s listing service system last month, that’s a decrease of 24 per cent over the same month last year and 17.3 per cent below the five-year average
“This time last year, sales were going through the roof,” Megan Bell, president of KWAR said. “The home buying scene is a little different this year with folks finally taking their postponed trips, attending weddings, and generally catching up on the many missed occasions of the past two years.”
Bell also said as people begin returning to the office, less buyers are looking for a commute and therefore less are moving to Waterloo region from elsewhere.
(Kitchener-Waterloo Association of Realtors)
Bell said recent mortgage rate hikes are also contributing to the cooling, but she warned against jumping to conclusions.
“While any shift in the market will result in some individuals predicting the worse, the simple reality is that the market we had been in was unsustainable,” Bell said.
“What this means for buyers is more inventory, more choices, and perhaps most importantly, potentially less stress when purchasing. For sellers, they need to ensure their properties stand out from the competition and be aware it may take more time to sell their home and for potentially less money than they were expecting.”
She said ultimately, buyers and sellers can both look at this as a positive. While the former can take their time choosing a home, the later can be assured the person buying their property is financially stable.
Here are the June average sale prices by home type:
Detached home: $920,349, no change from June 2021
Townhouse: $662,305, 11.9 per cent increase from June 2021
Apartment-style condo: $497,429, 11.7 per cent increase from June 2021
Semi-detached home: $710,284, 9.5 per cent increase from June 2021
POSSIBLE RATE HIKE FROM THE BANK OF CANADA
Many experts are forecasting another interest rate hike could happen as early as next week.
“We're expecting the Bank of Canada to raise interest rates by 0.75 per cent at this turn,” mortgage broker and Lowestrates.ca expert Leah Zlatkin said. “It is possible they could raise it as much as a point and it is possible they could also only raise it 0.5 per cent.”
Zlatkin suggests the time to tighten the budget is now, adding the current stress test exists for moments like this.
She said if you're a first time buyer who has pre-qualified, but has not yet purchased, you may want to double check that you can still afford the home you've had your eye on.
“That's something to keep in mind, that your budget may have shifted, if the Bank of Canada raises rates,” Zlatkin said.
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(Kitchener-Waterloo Association of Realtors)
