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Housing prices decrease in Kitchener-Waterloo for second straight month

Click to play video: 'New mortgage stress test designed to cool home market' New mortgage stress test designed to cool home market
New mortgage stress test designed to cool home market – May 21, 2021

Home prices in the area dropped for a second straight month, according to the Kitchener Waterloo Association of Realtors.

Realtors say the average cost of buying a home in Kitchener-Waterloo last month was $740,103. That’s down from April’s average price of $757,906, and down from the peak of $765,393 in March.

Read more: April home prices in Kitchener-Waterloo almost $200K higher than a year earlier

Still, May’s average price represents a massive 30.4 per cent increase over what a home was selling for a year earlier when the average was $568,275.

Detached homes in the area fell month over month from April to May by 3.1 per cent to $869,990 although they were also up 38.6 per cent in comparison to a year earlier.

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“Last month the market took a breath and calmed a bit, but there is still very strong demand throughout our region,” said Nicole Pohl, KWAR president.

New mortgage rules took effect across the country on June 1. These affect both first-time buyers and those looking to renew mortgages, though it is unclear what effect it will have on the market.

Read more: New mortgage stress test rules take effect. Here’s what you need to know

“While these changes will impact the affordability for some, I do not expect it to be very impactful due to the sheer number of buyers in our market,” Pohl said.

While home prices were down slightly, there was still plenty of action as KWAR says 854 houses changed hands last month, which is a slight increase from April, which also saw a high number of homes change hands as well.

“Prior to 2020, the previous 10-year average number of residential sales for May was 656,” Pohl said.

Houses continued to change hands quickly as the realtors’ group says that it only took nine days for a house to sell after being listed.

Despite a high number of homes being listed, inventory also remains low as the realtors say there was only 0.7 months’ worth of inventory available at the end of the month. The number represents how long it would be before they ran out of homes to sell with current inventory.

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Correction: This story originally reported that the average sale price of a detached home in May 2021 was $568,275 when in fact it was $868,990. We apologize for any confusion this may have caused.

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