Like the title says – the Waterloo Region saw a dip in sales through MLS compared to December in recent years. Not only that, but there were 5,823 homes sold in 2018 this is an 11.1% decrease from 2017. 263 transactions took place in December and this is a 13.2% decrease from December. This is only a slight dip from the 10-year December average of 268 sales for the month.
Similar to previous months the reasoning for this is rising interest rates and mortgage stress test is causing this. KWAR believes the first time and young home buyers are most impacted by these types of scenarios.
Total residential sales in 2018 included 3,355 detached (down 16.2%), and 1,553 condominium units (up 6.4%) which include any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 417 semi-detached homes (down 23.6%) and 431 freehold townhouses (down 7.7%).
But… The Average Price Still Went Up in 2018?
The average sale price of all residential properties sold in 2018 increased 3.4% to $483,537 compared to 2017. Detached homes sold for an average price of $575,412, an increase of 4.8% compared to 2017. During this same period, the average sale price for an apartment style condominium was $304,676 for an increase of 12%. Townhomes and semis sold for an average of $373,307 (up 5.5 %) and $396,391 (up 4.7%) respectively. The gross dollar amount actually decreased by about 8% year over year.
This is simply due to supply and demand. Ultimately, the area is still very desirable next to its Ontario counterparts as an extremely viable area to invest in. However, outside investors aren’t as speculative as they used to be. They are starting to understand the area’s trend line and are investing based on that.
Experts believe it will still be a seller’s market in 2018 and anyone that is trying to decide whether or not they should purchase should only expect the price of purchasing a home will rise. Not to create any unneeded urgency, but come on people! If you purchase a house, by the time it’s move-in date you will have already seen an increase in your investment.
The Rental Market Continues to Be Hot
Last year 733 residential leases occurred through MLS, an increase of 22% compared to 2017 and, a 40% increase compared to 2016. This is an interesting stat and is a result of the oversaturation of the rental market in the area. More and more owners are being represented by Realtors because they don’t know the area as much. They are investors from Toronto and abroad that ultimately need help getting a return on their investment. KW should see this number continue to increase and then plateau as the occupancy rate starts to return to normal.