Home sale prices in Waterloo region slump to lowest point in two years as sales slow

The president of the Waterloo Region Association of Realtors (WRAR) calls it the “end of a turbulent year for home sales in Waterloo region.”

Megan Bell said the number of homes sold in December was lower than any single month in “well over a decade.”

Meanwhile the average sale price for a single-detached home slumped to its lowest point in two years.

Data released Thursday by WRAR shows 280 homes were sold in Waterloo region last month, 39 per cent fewer than during December 2021 when the average sale price for a single-detached home in the region topped $1 million for the first time.

The average sale price across all property types, including condos, townhouses, detached and semi-detached homes, was $720,596 last month.

The average detached home sold for $825,450 – a 17.6 per cent drop compared to the same time last year and the lowest price recorded since December 2020.

“After home prices crossed the million-dollar threshold in February of 2022, we close out the year with average and benchmark prices back to where they were prior to them surging in early 2021,” Bell said in a media release.

“It’s clear that the decline in sale prices has been a direct response to the successive interest rate hikes by the Bank of Canada throughout the past several months, however, with interest rates predicted to stabilize, we should see a steadier market in 2023.”

DON'T CALL IT A BUYERS' MARKET

While home prices have come down, higher borrowing costs mean homeownership is still just as out of reach for many, WRAR said.

“With the rising interest rates we’ve seen a lot of buyers taking a step back, either it's due to their own uncertainty or they've been pushed out by the higher interest rates, so we're seeing a little bit of a return to normal but it's still a seller’s market currently,” Bell told CTV News during an interview Tuesday.

On top of that, Bell noted that inventory remains tight in Waterloo region, adding to challenges for prospective buyers.

"We’re seeing a lot less buyers being able to enter the market for a number of reasons," realtor Shawn Ramautor said. "But definitely one of them that we’re hearing a lot of and seeing a lot is qualifications rules and restrictions, it’s just stopping from people from entering the market with the increase borrowing cost."

SELLERS STRUGGLING TOO

Things are tough for sellers too.

Kitchener resident Vishal Bhalla describes the change in the market in the past six months as “day and night.”

He’s trying to sell a few condos he’s been renting out. After listing the properties about a month and a half ago, he expected they would be gone by the new year, but said no one has even been by to look recently.

“I was expecting maybe a bit of a slow down, but not as slow as it is,” said Bhalla.

According to WRAR, the homes sold in December stayed on the market for an average of 25 days, much longer than December 2021’s average of 11 days.

Ramautor calls it “a definite dip in the market.”