2024 was not without its challenges for the Waterloo Region real estate market, but signs of improvement emerged as the year progressed. While the resale market faced headwinds, year-end numbers reflect a modest recovery compared to 2023. By December, approximately 6,800 homes will have been sold across the region—a 5 percent increase from the previous year, according to local market data.
When viewed historically, these numbers reflect a market still regaining its footing. During the pre-pandemic decade, annual sales in Waterloo Region often exceeded 8,000 homes, peaking in 2021 with a record-breaking surge in transactions. This year’s performance is more aligned with the market activity of the late 1990s, reminiscent of a time when stability was the focus rather than explosive growth.
An Uneven Year
The first nine months of 2024 were defined by sluggish activity, a direct result of high borrowing costs. With the Bank of Canada’s overnight lending rate reaching 5.00 percent by mid-year—its highest in decades—and fixed mortgage rates hovering near 6.00 percent, affordability was a key concern for buyers across the region.
Despite these challenges, average sale prices in Waterloo Region held steady. In 2023, the average sale price across the area was approximately $850,000. By the end of 2024, it is expected to remain around $845,000, a marginal dip. Detached homes, semi-detached properties, and townhouses retained their value better than condominium apartments, which saw slight price declines due to reduced demand.
Interestingly, multiple offers were not uncommon for sought-after properties in desirable neighbourhoods like Uptown Waterloo, Laurelwood, and Hespeler. Well-priced homes in the $900,000 to $1,200,000 range continued to see competition, highlighting the resilience of specific segments of the market.
Rate Cuts Spark Market Resurgence
The turning point came in July when the Bank of Canada implemented its first rate cut—a modest 0.25 percent reduction. This marked the beginning of a series of cuts, with the overnight rate dropping to 3.25 percent by year-end. As borrowing costs eased, sidelined buyers re-entered the market, fueling a significant uptick in activity during the latter half of the year.
By December, year-over-year sales for the final quarter were up by more than 40 percent in Waterloo Region. Popular neighbourhoods like Eastbridge, Doon South, and Westmount saw heightened interest from buyers looking to take advantage of improving affordability.
Navigating Industry Changes
2024 also saw the implementation of Phase II of Ontario’s regulatory changes to enhance transparency in real estate transactions. Introduced in late 2023, these changes included mandatory consumer information guides, open bidding options, and the concept of “self-represented parties.” While open bidding was expected to gain traction, adoption has been minimal due to seller and buyer hesitancy.
The legislation, designed to address concerns over blind bidding during the pandemic, has had a limited impact on average sale prices so far. Looking ahead, Phase III regulatory changes are anticipated in 2025, potentially further shaping the local market.
Looking Ahead to 2025
As 2024 draws to a close, the Waterloo Region real estate market is poised for continued recovery in 2025. The final months of the year have been among the strongest, pointing to increased buyer confidence and market activity. With more stable borrowing costs and strong population growth supporting demand, 2025 is expected to bring a healthier balance to the local real estate landscape.
The challenges of the past two years have tested the resilience of the real estate community, but the optimism heading into 2025 is undeniable. Whether you’re considering buying or selling, the year ahead promises new opportunities in this vibrant and growing region.