‘A great opportunity’ as housing market climbs across Waterloo Region

In an encouraging sign for those looking for a home, new numbers show that the housing market may be moving in the right direction across Waterloo Region.

The data comes from the Waterloo Region Association of Realtors, which says home sales increased in October across detached, semi-detached, and condo units throughout the area.

“For the first time since May, we witnessed an encouraging rise in home sales throughout Waterloo Region last month,” Christal Moura, a Waterloo Region Association of Realtors spokesperson, said. “This positive trend reflects a shift toward more balanced conditions within our housing market and a renewed confidence among buyers.”

Detached homes increased by 15.4 per cent from October of last year, condominium sales increased by 1.5 per cent, and semi-detached homes increased by 53.1 per cent. One aspect that could be pointing towards these increases across the board could be some of the recent interest rate decisions seen throughout the country.

“What we found was the week leading up to the interest rate announcement, we noticed some buyers were just on the fence,” said local broker with Remax Twin Cities, Tony Johal. “I mean, if you’re a buyer getting into the market, you’ve heard this big news about the interest rate potentially coming down the week after, you are going to put your search on hold temporarily just to see what the outcome is going to be from the bank.”

He said the results of those interest rate decisions helped many home-buyers throughout Waterloo Region pull the trigger on purchasing their new home.

“If you are a buyer who is buying it for the convenience of being downtown and investing in real estate, and you are going to live there for a number of years, perhaps even when you’re done with it you may choose to rent it out at that point. I think it still represents a great opportunity for people to get into the market and still pick up a beautiful product at a half-decent price.”

While home sales themselves have increased, the costs for those homes have been left mostly unchanged, showing marginal changes compared to September as well as sales from a year prior. The one area that showed declines was townhouse sales, dropping upwards of 20 per cent. Johal said much of that is the result of buyers who are looking for investment rental properties rather than for homes to live in.

“I think it’s a great opportunity if you are a first-time homebuyer and you are buying this for yourself. But, I think if you are buying it as an investment property to rent it out to somebody in the future, some of these condo fees are $500 to $1,000 a month, in some cases even more. There goes all of your profit right there.”

Johal argued that those extra fees and charges have caused many to sell, with many purchasing the wrong properties for what they’re looking for, often either taking losses or breaking even on those investments.

“Some of them are selling it for below what they paid to the builder, but many of them are just listing it at what they’ve actually paid to the builder. By the time fees, penalties, and mortgage and realty fees, a lot of them are losing money on these things pretty aggressively. You know, nobody’s really kind of making money on these things from what I’m finding.”

“I do think that we are going to have a stronger winter market than what we had last year.”

He noted though that it has helped create a larger market to pick from in the region, with an increased number of houses available for first-time home buyers.

“Normally when you get to townhouses or especially apartment condos, you’re dealing with more condo fees and, of course, condo fees you cannot finance into your mortgage. Therefore, there always tends to be an abundance of inventory. Definitely, the detached homes, semi-detached homes, and even freehold townhouses are always very desired by buyers.”

Johal predicts that the high that is being seen in the region’s housing market could continue through the winter, expecting the momentum to carry forward through the end of 2024.

“I do think that we are going to have a stronger winter market than what we had last year. Is it going to be a continuation of fall and spring? Probably not, simply because you can have the greatest store in the world having the greatest sale in the world, but if no buyers are around to take advantage of that sale, then you’re not going to be selling much inventory.”