During 2016, the Waterloo Region real estate market was a rocket ship that just kept climbing. Demand thoroughly outweighed supply, home prices increased, and sales volumes were at record levels.
Will the 2017 real estate market continue accelerating? Or will home prices start to dip, turning the market into a thrilling rollercoaster ride?
Let’s review some of the facts and predictions for 2017:
Continued Lower Inventory Levels
The total number of homes sold throughout the Greater Golden Horseshoe is predicted to decrease, but the price of individual homes will continue to rise. This means the inventory levels are going to remain low throughout Waterloo Region, and bidding wars are going to continue being the norm.
Strong Price Growth in Region
The Waterloo Region real estate market is expected to see the average selling price for a home to increase by 8%. This bump would increase the average sale price of a home from $382,697 in 2016 to $413,313 in 2017. Reasons for the strong price growth in the region are based on the transportation upgrades and tech sector growth.
Spill Over From Neighbouring Cities
Toronto is also expected to see an average selling price increase of 8%, making the average sale price at nearly $785k. The average sale price in Hamilton-Burlington is expected to increase to nearly $600k. After 2015-2016 price increases of 19% and 14%, Brampton and Mississauga are expected to see slight drops. This may be a signal that a return to a more balanced market is coming. This region will continue to see the ripple effect, as Toronto buyers are looking further down the 407 and 401 corridors.
Effect of New Mortgage Rules
The newly tightened mortgage regulations require mortgage applicants to be “stress tested”. This means borrowers must have the ability to repay loans at higher interest rates than the current ones. These new rules do affect everyone, but first-time homebuyers are going to be the hardest hit, forcing some out of the market.
The reduction in the number of people eligible for mortgages is expected to ‘cool’ the real estate market slightly, but mortgage rates remain historically low and these changes shouldn’t significantly affect overall purchasing power.
To recap, The Region of Waterloo will see:
- Continued low inventory levels
- Bidding wars are going to continue
- A price growth increase
- Continued increase of Toronto buyers
- Changes to mortgage rules will not drastically reduce buying power
Based on the above facts and predictions, I do not see a slowdown happening in the Waterloo Region real estate market. It will continue the skyward trend we saw in 2016, but maybe at a slightly slower incline.
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