Tips on Saving for that First Home Purchase

When it comes to buying your first home, a big part of that decision should be based on your current financial position and the impact a home loan will have on your finances and lifestyle.

For many first-time homebuyers, saving what is required for a down payment can seem overwhelming. However, sometimes saving for a down payment is as simple as managing your budget differently.

Start with a goal
One of the best ways to save is to have a goal. It will keep you motivated and give you something to work towards. For example, you may choose to save a 10% deposit plus expenses (usually 5%) for your first home. But the more you can save, the better off you’ll be. Find out how much you need to put aside in order to reach your savings goal.

Create a budget
Write down how much money you bring home each month; write down the payment amounts for each of your monthly bills; subtract your expenses from your income to determine how much extra money you have each month.

Develop a culture of saving 
Your first priority should be developing a culture of saving. This not only helps you in budgeting and planning for the future but also satisfies banks and other lending institutions that you have a clear commitment to save.

When you go shopping, ask yourself if you really need the item you are thinking of buying. If you don't need it, don't buy it. Put the money into your savings account instead. Remember that small amounts of money can add up to large sums over time.

Start an automatic saving plan 
Make saving automatic by setting up an automatic savings plan at your bank to regularly move a specific amount of money directly from your chequing account to a savings account. You’ll be surprised at how much you can save and how quickly the “pay yourself first” approach adds up.
   
Borrow from your RRSPs 
If you qualify as a first-time homebuyer, you may be eligible for the government's Home Buyers' Plan (HBP). This allows you and your spouse or partner to withdraw up to $25,000 each from your Registered Retirement Saving Plans (RRSPs) to add to your down payment or to cover purchase-related costs.

Best of all, you don't have to pay income tax on the funds, as long as you repay the total amount to your RRSP over the next 15 years. The repayment period starts the second year following the year you made your withdrawals. If the full $25,000 is withdrawn, the minimum annual repayment would be $1,666.

Take a holiday from tax 
If you open a new Tax-Free Savings Account (TFSA), you won’t pay any tax on earnings, which will help you compound your savings. You can contribute up to $5,000 a year to a TFSA, and save for anything you like, tax-free. 
 
Review your mortgage options 
Once you make the decision to purchase a property, the next choice is the type of loan to suit your budget. The two most common types of loans are the variable interest rate loan and the fixed interest rate loan.  
 
You can now choose to pay back your mortgage over 25 or 30 years, instead of the traditional 20-year amortization period. This means you will pay more interest over the long term, but you can reduce monthly payments to get into your starter home. You can always change this later, once your income rises and you can pay your mortgage down faster. 
 
Get into a starter house 
Try to be as flexible as possible when choosing your first home. Unless you’re status conscious, your first home doesn’t necessarily have to be your dream home. You could settle for a starter home, which you can afford with a small down payment and easy mortgage installments. There are plenty of lower-priced houses out there in need of repair, with some "Do-It-Yourself" projects where you can add more value to the house. Be careful not to buy a place where the cost of repairs will eat up any profits you might make when you sell.

In just a few years you will build enough equity in your starter home to make it easier for you to sell and move into your dream home.

Buying your first home is an exciting process. After all, your home could be the largest asset you’ll ever own. Being able to finance most of its cost will take a load off your back in the future.

Dealing With Mortgage Payment Difficulties

When unforeseen financial circumstances impact your ability to make regular mortgage payments, it’s important for you to take quick action. With early intervention, cooperation, and a well-executed plan, you can work together with your mortgage professional to find a solution to your financial difficulties.

If you or your spouse has lost employment and no longer makes as much money, and you see meeting your mortgage payment obligations is going to be problematic, the first step is to take a deep breath. There are literally millions of people that face the same problem. Fortunately, there are ways to avoid default and keep your home, so read on for more information on how to avoid mortgage default.

1- Get moving on a solution. Your first option is to find a way to make up the back payments and continue fighting to make your payment on time every month. Although not an attractive option, it is an option.

Explore options to decrease expenses and increase income, such as an additional job, selling possessions, and looking to community resources for help. You may have to temporarily cut back on things like dining out, internet, and cable.

If you have a basement or spare room you may consider renting it out. The extra income could be up to 50% of your mortgage payment.

2- Work with your lender. Contact your mortgage lender. Banks do not want to foreclose on properties. The process is long and costly, and in the end, mortgage lenders lose money. Instead, they would rather work alongside borrowers that are slightly behind on payments, and come up with a practical solution.

Consider extending your mortgage term to reduce your monthly payments. The downside is that you will end up paying more in the long term. However, if it means you are able to continue meeting the minimum mortgage payments, it is worth doing.

Set up a repayment plan. If you are unable to pay your mortgage payment for one or more months, the lender may agree to a repayment plan. The mortgage lender adds additional money to each subsequent mortgage payment until the loan is up-to-date.
Your lender may also suggest an Interest Only Mortgage. This will also reduce your monthly mortgage payments, often quite substantially. However, again the disadvantage is that, in the long term, you will need to find an alternative investment plan to pay off your mortgage capital—which might be a good short-term option.

3. Refinance your mortgage. This is perhaps the easiest and most effective method. If you happen to be on your bank’s existing standard rate, the chances are you will be able to find a much better deal.

4. Talk to a Financial Advisor. if the situation is becoming overwhelming and you are really in danger of defaulting, you may need to consider speaking to a financial consultant or accountant. This will arm you with expertise and resources with which to approach planning your financial future and make the most of your current circumstances.

5. Resell – Downsize. This option is probably the most drastic and only to be undertaken when the others have failed. If you are able to sell your house, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

If you can see that things are going to get bad in relation to meeting your mortgage payment obligations, take a deep breath and take action now—it will help in the long run.

Buy or Rent Your Next Home?

Buying a house can be the most rewarding purchase you ever make. However, depending on your current circumstance this may not be yourbest option. To help make an educated decision, try to answer the following questions first:

1. Do you really want to own your home?
Some would argue that this is the first question you should ask yourself. Homeownership, like everything else, is a matter of choice. Only you can decide whether or not home ownership is important to you. If it is then you may want to re-assess how you spend your money every month.

2. How often do you expect to move in the future?
If you expect to be moving a lot (every couple of years or more) then you probably shouldn't buy your own home. Every time you buy or sell a home you incur significant costs. Unless you get lucky and the value of the home you purchased goes up by at least 10%, you'll be losing money.

3. How stable is your employment situation?
You should only consider buying a home if your employment is stable. Home ownership requires a number of regular payments like the mortgage, property taxes, maintenance, insurance, etc. Missing any of these payments can trigger terrible consequences for a homeowner. Unless your employment is stable, your best option is "renting".

4. Can you afford to make the monthly payments?
When qualifying for a loan, most mortgage companies will not allow your housing costs to be more than 33% of your gross income. Housing costs include your mortgage payment, property taxes, utilities, and 50% of condo fees if applicable. If your total debt servicing costs (housing costs plus all of your other monthly debt payments) exceed 40% of your gross income you will not qualify for a mortgage.

How much rent are you paying now? What is the maximum amount you are willing to pay?

If you buy a home, it is important to have some money set aside for "emergencies". You may not be able to save as much money as a homeowner as you did when you were renting, but it is important that you leave some room in your budget. If you have to stretch your budget too far, you should definitely reconsider your home purchase.

5. Do the math
Housing costs can be divided into shelter costs and investment costs. When you rent, you pay your shelter costs, and the landlord pays the investment costs. When you buy, you pay both, which is usually more. Ten years later when you sell the house, you will find that your investment did well and you saved a lot of money by buying.

From a purely financial standpoint, whether you should rent or buy comes down to your monthly budget and the cost of borrowing. If you have a down payment and interest rates are 5% or lower, it makes very little difference whether you rent or buy. At interest rates above 8%, buying will cost you 20% or more than renting.

Although it might seem that you will be spending more money on buying a house than renting, you need to consider your options and priorities. There are many more advantages of purchasing a home over renting.

Conclusion
Buying a house is an investment, and for many people, it is a good one. You can purchase insurance to help you manage any potential risks like fire, earthquakes, and theft. Remember to take your buying/selling costs into account when considering selling your home. The strength of the real estate market in your area will determine the return on your investment.

Assuming that you can afford the increased costs of owning your home, the question of what's better, renting or buying a house, becomes one of personal preference. There is a certain satisfaction in owning your own home, but only if it is important to you.

If you are only staying somewhere for a short period of time (less than five years), renting is almost always better; the transaction costs of buying and selling houses will definitely make it less expensive just to rent.

For longer periods, buying a house is usually better. Although if you have the discipline to invest the difference between your rent and your potential mortgage and other buying costs in a reasonably high-yielding investment, renting might be better. But that’s if you carefully figure out the difference and diligently invest in that difference. If you can’t do that then buying is probably the better choice.

Buying a house is usually a sound long-term investment as it helps you build equity vs. throwing your hard-earned money away as rent real estate generally appreciates; a house bought today is worth more a few years down the road.

Pros and Cons of Buying a Pre-Construction/New Home

When trying to decide whether to buy an older home or a newly constructed one, many questions come to mind. Start by educating yourself and knowing the pros and cons of each.

In most cases, existing homes have a touch of character with their own charm and details.  They are usually located in more established neighbourhoods with mature trees and desirable landscaping and may be closer to city services such as schools, libraries, hospitals, shopping centres and public transportation.

Older homes may have better quality materials and workmanship that are too costly for newer homes and may come with window coverings and appliances which are often included with the home. If you are lucky, you may still get an updated kitchen and bathrooms if the home has been renovated.

However, existing homes are generally less energy efficient and are typically more costly to heat and cool. They may need updating and require expensive repairs, and sometimes it may be difficult to find or match older building materials.

Newer homes usually have bigger rooms, more built-in wardrobes and closets, and more bathrooms. If you are building a new home you can also influence the layout and the finishes within the home as part of the negotiations with the builder or developer.

Whereas with an existing home, you will inherit what the previous owner built or remodelled over time. Very rarely will an existing home be built and finished exactly to your liking. Think about how much renovating you'll need to do to an existing home. If you can buy an existing home that's been totally renovated in a great neighbourhood within a good school district this might be a better choice than moving into a newer neighbourhood with an un-established school district.

On the other side, buying a newly-built home tends to cost more than an existing home, unless you buy outside of the city, where land is cheaper. Of course, you will have to consider the price of gas to get to your job.

And it isn't just about getting to your job. You'll also want to think about how long it will take to get to a grocery store, dry cleaners, your kids' school, your house of worship and other places you get to by car.

While new homes are more expensive, they might also increase in value faster than an existing home. That said, it may be challenging to buy a new home in your neighbourhood of choice, unless you buy a vacant lot, hire a developer and build your own home which can get quite costly.

However, with new homes, you get warranties and guarantees on appliances that come with the new home. Dangerous building materials, such as lead and asbestos, will likely not be a problem. A new home will meet modern safety and building codes and usually use building materials that offer improved insulation, thereby reducing your heating bill.

You may be able to upgrade or customize such features as floor coverings or paint colours and sometimes the floor plan. New homes often have more closets and storage space and most importantly don't require as much maintenance.

New homes though have their own disadvantages. Higher taxes could be required to bring water, gas or electrical services to a still under-populated area. Resale could be difficult if the entire neighbourhood is not yet complete, and you may have to cope with construction noise, dust and mud. New neighbourhoods frequently lack the relaxing appearance of mature trees, and your new subdivision may require costly landscaping.

You can make the case for and against buying either a new home or a "used" home. It's great to live in a brand-new home, but there's nothing like the feel of an established neighbourhood. The bottom line is: Don't buy someone else's problems unless you can tackle the solutions.

 Find a house you like, consider its pros and cons — objectively, as well as emotionally — and think about the compromises you're willing to make. The more logically you approach buying the house, the more you're going to love living in it.

The Demand for Home Ownership Continues to Outpace Supply of Homes

The demand for ownership housing has picked up markedly in recent months. Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market. In addition, strong rent growth and record population growth on the back of immigration have also supported increased home sales. The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring.

Ontario - The Demand for Ownership Housing Has Picked Up Markedly.

Toronto,01 June 2023 -- The Greater Toronto Area (GTA) housing market continued to improve from a sales perspective in May 2023. Unfortunately, the supply of homes for sale did not keep up with the demand for ownership housing. Sales as a share of new listings were up dramatically compared to a year ago. This is a clear signal that competition between buyers increased substantially compared to last year, resulting in the average selling price reaching almost $1.2 million last month.

“Despite the fact that we have seen positive policy direction over the last couple of years, governments have been failing on the housing supply front for some time. Recent polling from Ipsos found that the City of Toronto residents gave Council a failing grade on housing affordability and pointed to lack of supply as the major issue. This issue is not unique to Toronto. It persists throughout the Greater Golden Horseshoe. If we don't quickly see housing supply catch up to population growth, the economic development of our region will be hampered as people and businesses look elsewhere to live and invest,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.

GTA REALTORS® reported 9,012 sales through TRREB’s MLS® System in May 2023 – a 24.7 per cent increase compared to May 2022. Conversely, new listings were down by 18.7 per cent over the same period. On a month-over-month seasonally adjusted basis, sales were up by 5.2 per cent compared to April 2023.

“The demand for ownership housing has picked up markedly in recent months. Many homebuyers have recalibrated their housing needs in the face of higher borrowing costs and are moving back into the market. In addition, strong rent growth and record population growth on the back of immigration have also supported increased home sales. The supply of listings hasn't kept up with sales, so we have seen upward pressure on selling prices during the spring,” said TRREB Chief Market Analyst Jason Mercer.

The MLS® Home Price Index (HPI) composite benchmark was down by 6.9 per cent year-over-year in May 2023, but up by 3.2 per cent on a seasonally adjusted monthly basis compared to April 2023. The average selling price, at $1,196,101, represented a small 1.2 per cent decline relative to May 2022. On a seasonally adjusted monthly basis, the average selling price was up by 3.5 per cent compared to April 2023.

 

Ottawa Resale Market Heats Up in May

Ottawa, June 5, 2023 -- Sales increase for the first time since February 2022

Members of the Ottawa Real Estate Board (OREB) sold 1,939 residential properties in May through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,830 in May 2022, an increase of 6%. May’s sales included 1,477 in the freehold-property class, up 8% from a year ago, and 462 in the condominium-property category, a 1% increase from May 2022. The five-year average for total unit sales in May is 1,961.

“Typically the highest-selling month, May’s transactions did not disappoint,” says Ken Dekker, Ottawa Real Estate Board President. “This month we saw the first year-over-year unit sales volume increase since February 2022. It is a promising year for sellers barring any interest rate adjustments, as we saw a correlated drop in sales every time there was an interest rate hike in 2022.”

“However, with only five to six weeks of inventory, we are in a strong seller’s market. With the pent-up high demand and sales volume increasing, we are likely to see upward pressure on prices as demand continues to outstrip supply.”

By the Numbers – Average Prices*: 

The average sale price for a freehold-class property in May was $745,902, a decrease of 7% from 2022, but still on par with April 2023 prices.

The average sale price for a condominium-class property was $442,859, decreasing 6% from a year ago. However, it marks a 2% increase over April 2023 prices.

With year-to-date average sale prices at $727,728 for freeholds and $428,394 for condos, these values represent a 12% decrease over 2022 for freehold-class properties and a 9% decrease for condominium-class properties.

“We are not seeing steep price escalations yet. May’s average prices stayed on par with April’s, although prices are well over what we saw at the end of 2022. With demand mounting in Ottawa’s chronically undersupplied market, I expect the average sale price will surpass last year’s figures for a month over the same month in the latter half of 2023 again—provided we do not see interest rate hikes.”

By the Numbers – Inventory & New Listings:

May’s new listings (2,822) were 9% lower than May 2022 (3,117) and up 32% from April 2023 (2,140). The 5-year average for new listings in May is 2,922.

Months of Inventory for the freehold-class properties has increased to 1.5 months from 1.2 months in May 2022 but down from 1.9 months in April 2023.

Months of Inventory for condominium-class properties has increased to 1.3 months from 1 month in May 2022, although down from 1.9 months in April 2023.

Days on market (DOM) for freeholds decreased from 27 to 23 days and 33 to 26 days for condos compared to last month.

“Given our housing stock challenges, some neighbourhoods are again in multiple offer territory. REALTORS® have up-to-the-minute market data and are best positioned to help both buyers and sellers in this evolving competitive resale market.”

REALTORS® also help with finding rentals and vetting potential tenants. Since the beginning of the year, OREB Members have assisted clients with renting 2,731 properties compared to 2,230 last year at this time, an increase of 22%.

METRO VANCOUVER MARKET HIGHLIGHTS

Metro Vancouver, 17 MAY 2023 -- While the year started slower than usual, Metro Vancouver’s1 housing market is showing signs of heating up as summer arrives, with prices increasing for the sixth consecutive month.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,4112 in May 2023, which is a 15.7 per cent increase from the 2,947 sales recorded in May 2022, and a 1.4 per cent decline from the 10-year seasonal average (3,458).

"Back in January, few people would have predicted prices to be up as much as they are – ourselves included. Our forecast projected prices to be up modestly in 2023 by about two per cent at year-end. Instead, Metro Vancouver home prices are already up about six per cent or more across all home types at the midway point of the year." Andrew Lis, REBGV director of economics and data analytics

There were 5,661 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in May 2023. This represents an 11.5 per cent decrease compared to the 6,397 homes listed in May 2022, and was 4.3 per cent below the 10-year seasonal average (5,917).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,293, a 10.5 per cent decrease compared to May 2022 (10,382), and 20.6 per cent below the 10-year seasonal average (11,705).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for May 2023 is 38.4 per cent. By property type, the ratio is 28.5 per cent for detached homes, 45 per cent for townhomes, and 45.5 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“You don’t have to squint to see the reason prices continue to increase. The fundamental issue remains that there are more buyers relative to the number of willing sellers in the market. This is keeping the number of resale homes available in short supply,” Lis said.

“And in a surprising twist, MLS® sales in May snapped back closer to historical averages than we’ve seen in the recent past, despite mortgage rates being where they are now, and new listing activity has been slower than usual this spring. If mortgage rates weren’t holding back market activity so much right now, I think our market would look a lot like the heydays of 2021/22, or even 2016/17.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,188,000. This represents a 5.5 per cent decrease over May 2022 and a 1.3 per cent increase compared to April 2023.

Sales of detached homes in May 2023 reached 1,043, a 30.7 per cent increase from the 798 detached sales recorded in May 2022. The benchmark price for a detached home is $1,953,600. This represents a 6.7 per cent decrease from May 2022 and a 1.8 per cent increase compared to April 2023.

Sales of apartment homes reached 1,730 in May 2023, a 7.9 per cent increase compared to the 1,604 sales in May 2022. The benchmark price of an apartment home is $760,800. This represents a two per cent decrease from May 2022 and a 1.1 per cent increase compared to April 2023.

Attached home sales in May 2023 totalled 608, a 16.7 per cent increase compared to the 521 sales in May 2022. The benchmark price of an attached home is $1,083,0003. This represents a 4.7 per cent decrease from May 2022 and a 0.2 per cent increase compared to April 2023.

 

Alberta -- May sales reach a record high

City of Calgary, June 1, 2023 – Thanks to a significant gain in apartment condominium sales, May sales rose to 3,120, a new record high for the month. While the monthly gains have not outweighed earlier declines, this does reflect a shift from the declines reported at the start of the year.

At the same time, we continue to see fewer new listings on the market than last year, causing inventory levels to fall. With a sales-to-new-listings ratio of 85 per cent and months of supply of one month, conditions continue to favour the seller placing further upward pressure on home prices.

“Calgary’s housing market continues to exceed expectations with the recent gain in sales activity this month,” said CREB® Chief Economist Ann-Marie Lurie. “The higher interest rate environment and recent rental rate gains have driven more consumers to seek apartment condominium units. In addition, the recent rise in new apartment listings has provided enough options to support the sales gain. Calgary continues to benefit from the relatively healthy job market and recent population growth keeping housing demand strong across all property types.”

Persistently tight market conditions drove further price growth this month. In May, the unadjusted benchmark price reached $557,000, over one per cent higher than last month and nearly three per cent higher than last year’s monthly peak price of $543,000.

Detached - Rising sales for homes priced above $600,000 was not enough to offset declines in the lower price ranges as May sales reached 1,486, a year-over-year decline of eight per cent. New listings continue to fall for homes priced below $700,000, providing limited choice for consumers seeking out lower-priced detached homes. While new listings did improve for higher-priced properties, the relatively strong demand kept conditions tight across all price ranges, driving further price gains.

In May, the detached benchmark price reached $674,000, nearly two per cent higher than last month and over four per cent higher than last year’s peak price of $647,000. While each district reported a new record high price this month, the year-over-year gains ranged from a high of 12 per cent in the East District to a low of two per cent in the City Centre.

Semi-Detached - Sales also rose to near-record highs for the month for semi-detached homes. However, with 279 sales and 269 new listings this month, inventories fell, and the months of supply dropped below one month.

The exceptionally tight conditions caused further price gains, which for the first time, pushed above $600,000. This is the seventh consecutive month where prices have trended up, and as of May, levels are over three per cent higher than last year’s monthly peak. Like the detached sector, each district reported new record high prices in May. However, the strongest year-over-year gains occurred in the most affordable East district at nearly 12 per cent.

Row - New listings in May improved over levels seen earlier in the year, but thanks to monthly gains in sales, the sales-to-new listings ratio remained exceptionally high at 89 per cent, preventing any significant shift in the low inventory situation. While sales activity is still lower than last year’s levels, this is likely related to the lack of supply in this segment of the market.  Inventory levels are down 50 per cent compared to last year.

With less than one month of supply, it is not a surprise that prices continue to rise. In May, the benchmark price reached $390,500, a two per cent gain over last month and nearly nine per cent higher than last year's peak price of $359,600. Row prices rose across all districts, with year-over-year gains exceeding 15 per cent in the city's North East, South and East districts. The slowest price gains occurred in The City Centre, North West and South East at rates of over seven per cent.

Apartment Condominium - Sales in May reached 858 units, a year-over-year gain of 36 per cent and high enough to cause year-to-date sales to rise by four per cent for a new record high. Stronger sales were possible thanks to the recent gains in new listings. There were 1,025 new listings in May, a year-over-year gain of eight per cent. Despite the gain in new listings, the sales-to-new listings ratio remained high at 84 per cent, preventing any significant shift in inventory levels. As a result, inventory levels remained 23 per cent lower than what was available in the market in May 2022. The rising sales and low inventories kept the months of supply low at just over one month.

Persistently tight conditions drove further price gains in May. The unadjusted benchmark price reached $298,600, a monthly gain of over one per cent and a year-over-year gain of nearly 11 per cent. The recent growth has finally caused unadjusted apartment condominium prices to return to 2014 levels. Unlike other areas, not all districts reported a new record high price. The only areas to report a full recovery were the North, North West, West and South East districts. Overall year-over-year price growth ranged from a high of 16 per cent in the North District to a low of 10 per cent growth in the City Centre.

REGIONAL MARKET FACTS

Airdrie - Limited supply choice continues to weigh on sales activity in Airdrie. In May, there were 260 new listings and 225 sales, keeping the sales to new listings ratio high at 87 per cent and preventing any significant shift in inventory levels. However, with less than one month of supply, conditions are tighter than they were last year at this time.

Persistently tight conditions caused prices to trend up for the fifth consecutive month. The benchmark price reached $502,900 in May, remaining shy of the record high of $504,200 achieved in April 2022. While total residential prices have not reached new record highs, detached home prices have reached a new record with a benchmark price of $587,200.

Cochrane - Like other markets in the area, the limited level of new listings is preventing stronger sales activity. In May, 135 new listings came onto the market, and there were 122 sales, keeping the sales-to-new listings ratio elevated at 90 per cent. While inventory levels are still higher than last year’s, they are still exceptionally low for this time of year, leaving the months of supply just above one month in May.

The persistently tight conditions caused prices to trend up for the fourth consecutive month. While the benchmark price of $515,600 remains below the monthly high of $517,900 achieved in June 2022, should conditions continue to remain this tight, we could see further upward pressure on home prices over the next several months.

Okotoks - Like other markets, low levels of new listings are limiting sales activity in the town. In May, new listings reached 87 units, and with 76 sales, the sales-to-new listings ratio pushed above 87 per cent. This also prevented any significant shift in inventory levels, and the months of supply once again dropped below one month.

Persistently tight market conditions caused prices to trend up for the fifth consecutive month. With a benchmark price of $575,900, prices are nearly four per cent above last year’s levels and at a new record high.

Waterloo Region Buyer and Listing Activity Ramps Up In May

WATERLOO REGION, ON (June 2, 2023) — In May there were 788 homes sold through the Multiple Listing Service® (MLS®) System of the Waterloo Region Association of REALTORS® (WRAR), representing a decrease of 10.9 per cent compared to the previous year and a decline of 12.6 per cent compared to the previous 5-year average for the month.

“The spring market is in full swing with robust buyer and listing activity observed in May,” says Megan Bell, president of WRAR. “It’s encouraging to witness a significant uptick in listing activity compared to April, and we remain optimistic that this positive momentum will carry into June. However, it’s worth noting that the number of listings being added to the MLS® System continues to be historically low.”

Total residential sales in May included 463 detached (down 17.6 per cent from May 2022), and 133 townhouses (down 10.7 percent). Sales also included 123 condominium units (up 17.1 per cent) and 67 semi-detached homes (up 1.5 per cent).

In May, the average sale price for all residential properties in Waterloo Region was $821,828 This represents a 5.6  per cent decrease compared to May 2022 and a 3.1 per cent increase compared to April 2023.

• The average price of a detached home was $964,130. This represents a 2.8 per cent decrease from May 2022 and an increase of 4.2 per cent compared to April 2023.
• The average sale price for a townhouse was $697,551. This represents a 2.4 per cent decrease from May 2022 and an increase of 5.0 per cent compared to April 2023.
• The average sale price for an apartment-style condominium was $482,926. This represents a decrease of 11.8 per cent from May 2022 and a decrease of 1.4 per cent compared to April 2023.
• The average sale price for a semi was $726,702. This represents an increase of 1.1 per cent compared to May 2022 and an increase of 5.8 per cent compared to April 2023.

“Waterloo Region properties remain in high demand, driven by our diverse economy and the desirability of our community, we continue to be in a seller’s market,” says Bell. “With limited inventory and a relatively low number of new listings being added to the MLS® system, buyers face intensified competition while sellers receive increasingly competitive offers.”

There were 1,264 new listings added to the MLS® System in Waterloo Region last month, a decrease of 32.6 per cent compared to May of last year and an 11.8 per cent decrease compared to the previous ten-year average for May.

The total number of homes available for sale in active status at the end of May was 900, a decrease of 24.9 per cent compared to May of last year and 41.0 per cent below the previous ten-year average of 1524 listings for May.

The number of months of inventory is up 13.3 per cent compared to May of last year, but still historically low at 1.7 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 May was 15, compared to 11 days in May 2022. The previous 5-year average is 16 days.