How has the Centre Wellington real estate market done in 2022?
Like much of Canada, the Real Estate market in Centre Wellington has certainly cooled off from the craziness of late 2021 and early 2022. It is however a very special market in that it’s a much smaller real estate market than many of the urban centers around us (Guelph, Kitchener-Waterloo, Cambridge, etc.). With interest rates rising in the fall, things really cooled down in the market but the steady increase in transactions and pricing has been consistent since February 2023 with average sale prices taking some large moves up over the past two months.
How has the market responded to the rate hikes from the Bank of Canada?
Centre Wellington has a lot of historic, unique homes and is also in a major growth phase of new construction so we see a bit of everything in our market. There was a noticeable drop off in both sales price (roughly 25% decline from the peak of 2022) and inventory turnover as homeowners decided not to list or simply couldn’t sell at the prices they had hoped and let their listings expire. It seems now that sellers have more realistic expectations for the sale price of their properties in todays market and with buyers getting comfortable with current mortgage rates the inventory turnover is picking up the pace.
What factors do you see impacting the market?
Centre Wellington is unique now compared to our surrounding areas. While almost all neighbouring communities are seeing historically low inventory levels available we are seeing an increase in inventory for sale. Now, it isn't a dramatic increase but we are currently differing from the national trend we are seeing elsewhere. This has led to a continued buyers market here. So, although prices are increasing and we are seeing multiple offer scenarios on a number of houses, buyers are still able to include due diligence clauses such as financing, inspection and sale of property while still being competitive on their offer. Regardless of where interest rates go from here we are feeling like the bottom of the downtrend is complete and if by chance mortgage rates begin to drop again a swing to a sellers market feels like it isn't far off.
Where do you see the market going in the future?
There are a number of external variables that are simply out of anyone's control to be overly accurate on a long term prediction. It is clear, however, that buyers have become comfortable with todays interest rate levels and if they were to hold or decline we would expect to see continued price increases as the buyer's side becomes more competitive. A major push in our market the past few years was fueled by the “work from home” shift in the workforce. Is that one of the reasons that Centre Wellington isn't quite as hot as the surrounding urban communities? Maybe it is, but we don't quite know yet as it isn't uncommon for us to be 60-90 days behind the city centre's trend.
What advice would you give to someone thinking about buying in the Wellington area?
If you want to buy in Centre Wellington then you should be seeing as many properties as possible that come anywhere close to meeting your criteria. Our inventory is sporadic in each category so you need to be prepared with pre-approvals and be ready when the right home does come for sale. We are not like other markets where a similar house to the one you missed out on is right around the corner, it could be weeks or months sometimes before that perfect match becomes available again. By that time you may be back into a competitive environment again on the buyer's side.
Thanks to Rob for answering these questions and giving us insight into the Centre Wellington market.
Check out our interest rate forecast for an up to date outlook on the mortgage market, including where our analysts predict rates will go over the next 5 years.