On a monthly basis, there were 280 homes sold in December, a decrease of 38.7 per cent compared to December 2021, and 32.3 per cent below the previous 5-year average for the month.
“The number of homes sold in December was lower than any single month in well over a decade, marking an end to a turbulent year for home sales in Waterloo Region,” says Megan Bell, President of WRAR.
Total residential sales in December included 166 detached (down 34.9 per cent from December 2021), and 56 townhouses (down 48.6 per cent). Sales also included 33 condominium units (down 47.6 per cent) and 25 semi-detached homes (down 16.7 per cent).
For 2022, total residential sales included 4,720 detached (down 23.5 per cent), and 1,430 townhouses (down 30.9 per cent). Sales also included 996 condominium units (down 21.9 per cent) and 624 semi-detached homes (down 24.4 per cent).
In December, the average sale price for all residential properties in Waterloo Region was $720,596. This represents a 15.5 per cent decrease compared to December 2021 and a 2.1 per cent decrease compared to November 2022.
- The average price of a detached home was $825,450. This represents a 17.6 per cent decrease from December 2021 and a decrease of 1.7 per cent compared to November 2022.
- The average sale price for a townhouse was $609,154. This represents a 17.0 per cent decrease from December 2021 and a decrease of 2.1 per cent compared to November 2022.
- The average sale price for an apartment-style condominium was $460,994. This represents a decrease of 7.9 per cent from December 2021 and an increase of 1.0 per cent compared to November 2022.
- The average sale price for a semi was $616,671. This represents a decrease of 18.7 per cent compared to December 2021 and a decrease of 4.0 per cent compared to November 2022.
“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,” says Bell. “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.”
There were 302 new listings added to the MLS® System in the Waterloo Region last month, a decrease of 20.3 per cent compared to December of last year and a 14.9 per cent decrease compared to the previous ten-year average for December.
In 2022 a record 13,471 new listings were added to WRAR’s MLS® System, an increase of 9.5 per cent compared to 2021, and a 12.2 per cent increase compared to the previous ten-year annual average.
The total number of homes available for sale in active status at the end of December was 575, an increase of 329.1 per cent compared to December of last year and 31.3 per cent below the previous ten-year average of 837 listings for December.
The number of months of inventory is up 350.0 per cent compared to December of last year, but still historically low at 0.9 months. Between 2009 and 2015, December’s average months of inventory was 2.3 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 December was 25, compared to 11 days in December 2021. The previous 5-year average is 24 days.
The average days to sell in 2022 was 14 days, compared to 10 days in 2021 and a previous 5-year average of 19 days.
While future homeowners should benefit from the fact that prices have come down from their extreme highs of early 2022, home affordability will continue to be a concern in 2023. Bell says, “The easing of home prices has not done much to help first-time buyers as soaring borrowing costs have put monthly payments out of reach for many prospective homebuyers.”
WRAR’s president also points out that Waterloo Region remains one of the tightest real estate markets in Canada as measured by months of housing supply. “By no means is Waterloo Region a buyer’s market,” says Bell. “Our community is in high demand as a sought-after place to live in. And throughout most of 2022, we were working with less than one and a half months of supply of inventory. Combined with rising interest rates, it is still a challenging market for buyers.”
However, Bell is pleased to see various government interventions and new housing policies set to come into force throughout the year. “One of the upcoming options for first-time home buyers includes the Tax-Free First Home Savings Account (FHSA) which is designed to give first-time home buyers the ability to save $40,000 on a tax-free basis with an annual contribution limit of $8,000.” The government is working with financial institutions to have the infrastructure in place for individuals to be able to open an FHSA and start contributing at some point in 2023.
Chartered Professional Accountants of Canada say Canadians can begin contributing to the FHSA in 2023 even though the rules don’t come into effect until April 1, 2023. Full details from the Government of Canada can be found here.
The provincial government has also introduced several bills that tackle the housing crisis head-on. “One change in particular that has caught my attention – is the move to see gentle density and intensification within residential areas by allowing up to three residential units ‘as of right’ on most land zoned for one home without needing a municipal by-law amendment,” says Bell. “Realtors were one of the first groups to champion ending exclusionary zoning. It will be noteworthy to see how this is integrated within Waterloo Region and in communities across the province.”
Those requiring specific information on property values should contact a local REALTOR®. Working with a Realtor is the best way to get a complete picture of the property and community you are considering.
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