The spring market arrives in Kitchener Waterloo on time
The Waterloo Region Association of REALTORS® reported that sales volume through the Multiple Listing Service® (MLS®) System in March 2023 was low with 611 homes sold, a decrease of 38.4% compared to March 2022 and 33.6% below the previous 5-year average for the month. However, home sale prices increased modestly month-over-month due to borrowing costs stabilizing and lenders offering more appealing rates. The average sale price for all residential properties in Waterloo Region was $779,017, representing an 18.6% decrease compared to March 2022 and a 2.4% increase compared to February 2023. The total number of homes available for sale in active status at the end of March was 716, an increase of 17.2% compared to March of last year. The number of months of inventory is up 85.7% compared to March of last year, but still historically low at 1.3 months.
How will record breaking immigration impact Canada’s housing market?
Canada’s population was 39,566,248 on January 1, 2023, with over 1 million new arrivals in 2022, representing the greatest annual population growth rate since 1957. The main driver of growth was inbound international migration, accounting for 95.9% of the increase. The increase is attributed to the government’s efforts to ease labour shortages in key sectors of the economy, but it may pose challenges for housing, infrastructure, transportation, and service delivery. The overall number of international arrivals to Canada in January 2023 reached 78.4% of the pre-pandemic level registered in January 2020. If this rate of population growth continues, it could lead to Canada’s population doubling in about 26 years.
Mortgage Rates Are Still Significantly Higher Than Last Year, but…
Conventional mortgage rates have fallen for the second consecutive month since a significant climb. These mortgages are uninsured and historically popular, and their rates are influenced by the Government of Canada 5-year bond yield. Recent falling yields are expected to lower fixed-term mortgage rates. While Canadian mortgage rates are not significantly decreasing, the average 5-year conventional mortgage rate fell 0.05 points to 5.81% in February, marking a change in direction from a steep climb.