June 2021 Market Update

Since the beginning of 2021, sales in Kitchener Waterloo have appreciated. See below for some insight of what has transpired over the past year.

Plenty can change over the course of a year – something we know all too well looking back from where we stand here in June of 2021.  While entire aspects of our daily lives have been upended with the increasingly rapid pace of vaccine rollouts, we’re now able to see a return to normality a little more clearly on the horizon.  But on the real estate front, some of the more unexpected aspects of the past year’s events seem set to carry on through and beyond the pandemic recovery.

Last year’s CMHC prediction of a sharp fall in prices proved wildly inaccurate, but it was based upon a national average.  Some markets across the country have undoubtedly suffered as a result of the pandemic, but here in Waterloo Region our resale market witnessed unprecedented gains in average sale prices across all property types and in every price range.  Now, CMHC is calling for higher-than-normal average sale prices and a seller-friendly market to continue to be the norm in our region for the balance of 2021.

Should interest rates remain low for longer than anticipated, prices and activity will stay elevated.  On the other hand, if interest rates climb more quickly than anticipated (a real possibility given the emergence of inflation as a result of Federal Covid-relief programs and quantitative easing), market activity would drop to the lower end of CMHC’s projected range.

Over the past 6 months we have seen the average sale price exceed a 30% increase from 2020 which is a staggering increase by any standard of measurement. That being said, any year-over-year centred analysis will paint a much gloomier picture for buyers, as the headline is nearly guaranteed to include the 30%-plus increase in the average sale price of all residential properties since May of 2020. By comparison, the month-to-month increase in average sale prices (since April 2021) was only 2.4%. On the detached home sector, since April we’ve actually seen prices fall by 3.4% - the first significant downward trajectory in over a year. While the market remains incredibly strong, the kind of price increases we’ve seen over the past 14 months were never going to continue indefinitely. This levelling out is wholly anticipated and only works to help the long-term stability of our market.

With the additional equity most have made on their home over the past 12 months, many are using that equity to purchase a rental or recreational property. I’d be happy to explain how you can use the accrued equity in your home to expand your investment portfolio in a short term (Airbnb) or long term rental property.

If you want an idea of what your home is worth in today’s strong sellers market, reply to this email or send me a text.