As we step into 2025, the Waterloo Region real estate market reflects both resilience and optimism. While annual home sales remained below long-term historical averages, the final months of 2024 demonstrated significant momentum, pointing to an improving market landscape. With lower interest rates, increased inventory, and new federal housing policy changes, buyers and sellers alike are finding renewed confidence as we enter the new year.
A Slow Start, But a Strong Finish
In 2024, 6,777 homes were sold through the MLS® System in Waterloo Region, a 2.8% increase compared to 2023. While still 18.9% below the five-year average, this growth marks a positive shift in market activity, particularly in the latter part of the year.
December was especially strong, with 334 homes sold, up 14.4% year-over-year, and the strongest December performance in recent years. This boost coincided with lower interest rates, bringing many sidelined buyers back into the market.
December Sales Breakdown:
- Detached homes: 189 sales (+8.0% year-over-year)
- Townhouses: 83 sales (+48.2% year-over-year)
- Condo apartments: 41 sales (+10.8% year-over-year)
- Semi-detached homes: 21 sales (-12.5% year-over-year)
While semi-detached home sales slowed, townhouses and condominiums gained traction, likely due to improved affordability and inventory levels.
Home Prices Remain Stable
Despite fluctuating sales, Waterloo Region’s home prices held steady throughout 2024, with only a 0.3% decrease year-over-year, bringing the average annual home price to $784,343.
December 2024 Average Home Prices:
- All residential properties: $763,840 (+3.3% year-over-year)
- Detached homes: $898,204 (+6.0% year-over-year)
- Townhouses: $630,676 (+1.7% year-over-year)
- Condo apartments: $475,006 (-3.7% year-over-year)
- Semi-detached homes: $644,786 (+5.1% year-over-year)
The detached home segment saw the strongest price growth, while condo apartments experienced some softening, likely due to increased inventory levels and shifting buyer demand.
More Homes Hitting the Market
One of the key shifts in 2024 was the improvement in supply. The number of new listings increased 14.9% year-over-year, with 13,176 homes added to the market—10.8% above the 10-year average.
At the end of December, the number of active listings stood at 1,092, marking a 39.5% increase compared to December 2023 and 66.6% above the 10-year average. This increase in available inventory has provided buyers with more choices, reducing some of the intense competition seen in previous years.
The months of inventory—a measure of how long it would take to sell off existing supply—stood at 1.9 months, a 35.7% increase from December 2023.
- Condo apartments: 4.5 months of inventory
- Townhouses: 2.7 months of inventory
- Detached homes: 1.3 months of inventory
This shift towards a more balanced market is encouraging for buyers, particularly those who struggled with limited supply in recent years.
A Look Ahead to 2025
Several factors indicate that 2025 could bring further improvements to the Waterloo Region real estate market:
- Lower Interest Rates: The Bank of Canada’s rate cuts in late 2024 have already increased market activity, and further reductions are expected in 2025.
- Expanded Housing Affordability Programs:
- 30-year amortization options for first-time buyers on new construction took effect in December 2024.
- Insured mortgage cap increased to $1.5 million, making financing more accessible for higher-priced homes.
- Continued Population Growth: Waterloo Region remains a key destination for homebuyers due to its growing economy, strong job market, and desirable lifestyle.
While challenges remain, particularly in affordability, the momentum seen at the end of 2024 suggests a more balanced and active real estate market in 2025. With more inventory available and improving financing conditions, both buyers and sellers can enter the new year with cautious optimism.
The information has been drawn from sources deemed to be reliable, but the accuracy and completeness of the information is not guaranteed. In providing this information, Chestnut Park Realty Southwestern Ontario does not assume any responsibility or liability.
