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Ontario's Housing Market is Flipping: Waterloo Region Real Estate Market Update


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Covered today

⛰️ Market peak

💸 Interest rates

👨‍🎓Student visas


Ontario real estate market recap for January

⬆️ Increases demand

⬇️ Decreases demand


⬇️ MASSIVE change for international students and investors in the Ontario real estate market

There are 526K international students currently living in Ontario representing 51% of all student visa holders in Canada

The government set a limit on how many student permits they will give out over the next two years, along with new limitations on visas for spouses of international students. Additionally, Canadian universities must now give international students a place to live.


This disproportionately impacts the Ontario real estate market compared to other places in Canada.


⬆️ Bank of Canada held the rate

This means that the cost of borrowing money, like getting a mortgage on a variable rate, won't go up or down. With less rate fear, home buyer's opinions of the market improving. We're seeing an increase in activity.


⬆️ Fixed mortgage rates are dropping

Buyers can spend less on interest in their mortgage compared to last year, and as a result, are getting approved for a higher purchase price.


We need to build 88K homes in the Waterloo Region

Let's take a look at which local cities are on track to meet their respective share of the 1.5 million homes needed to bring affordability back to the Ontario real estate market:


This chart displays the number of homes needed in each Ontario region.


Has the market peaked?


Lower interest rates typically mean more purchasing power for buyers in terms of mortgage payments. In a recession, the opposite can be true, too.


Historical data shows that when the Bank of Canada enters a rate-cut cycle, prices drop. This is most likely due to the job loss that occurs in a shrinking economy. However, we've recently been through a period of record population growth and immigration, a massive housing shortage, and the lowest number of homes built since the 70s.


In my opinion, there are too many variables to predict the 2024 real estate market.


Home prices have risen quickly in the Waterloo Region, despite the average home cost staying flat across Canada.




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