Canada 2023 – the Right Time to Look at Kitchener Homes for Sale?
Kitchener is the 10th largest city in the province of Ontario, Canada. With a population of over 233,000, it is part of the tri-city area along with Cambridge and Waterloo. Kitchener is a hub for innovation and technology, with numerous tech companies, startups and research institutions located in the city and surrounding area. In a multicultural, vibrant city that offers a high quality of life, it is understandable that home buyers and investors eagerly peruse “Kitchener homes for sale” listings.
History and Attractions
The city has a rich history, with roots dating back to the 1700s when the Iroquoian-speaking Neutral Nation originally inhabited it. The German Mennonite community later settled in the area during the early 1800s, and the city was named Berlin until 1916, when it was renamed Kitchener. It is home to the University of Waterloo and Wilfrid Laurier University, two of the top research-focused universities in Canada.
Kitchener has a vibrant arts and culture scene, with numerous festivals and events held throughout the year, including the Kitchener-Waterloo Oktoberfest, one of the largest German-Canadian festivals in the world. Kitchener-Waterloo supports various arts organizations, including a symphony orchestra, philharmonic choir, little theatre, and art society. Kitchener is also known for its beautiful parks and natural areas, including Victoria Park, McLennan Park and the Grand River Conservation Authority, providing numerous outdoor recreation and leisure opportunities.
Average Sales Prices in the Waterloo Region
The Waterloo Region Association of REALTORS (WRAR) is formed through the amalgamation between the Cambridge Association of REALTORS®️ and the Kitchener-Waterloo Association of REALTORS®️ , and they offer services within the Waterloo region, including Cambridge and Kitchener.
According to WRAR reports, in December 2022, the average sale price for residential properties in the Waterloo Region was $720,596, a decrease of 15.5% compared to December 2021. The image below shows the Average Sales Price in December 2022, 2021 and 2020 across the Waterloo region.
The average price of a detached home was $825,450, a 17.6% decrease from the previous year, while a townhouse was $609,154, a decrease of 17.0%. On the other hand, the average sale price for a condo apartment was $460,994, with a 7.9% decrease from the previous year but an increase of 1.0% compared to November 2022.
Kitchener’s average sale price for all residential properties was $703,650 in December 2022.
Canada’s Housing Market
The actual (not seasonally adjusted) national average home price was $626,318 in December 2022, down 12% from last year.
Notably, Greater Vancouver and Greater Toronto Area’s housing markets are known for high real estate prices. The average home price is lower when these markets are excluded from the calculation. In addition, while the national average gives a general idea of Canada’s housing markets, it does not accurately reflect the average home prices and trends in other regions or cities.
Global inflation remains high, affecting a wide range of countries. The decrease in inflation in many countries can be attributed to a drop in energy prices and improving global supply chains. Financial conditions, while still restrictive, have become more accommodative since October, and the Canadian dollar has been relatively stable against the US dollar.
In Canada, inflation has decreased from its peak but remains above the target level. As interest rates continue to impact the economy and with the decrease in energy prices and enhanced supply chains, inflation is expected to reach 3% by mid-2023 and eventually hit the target of 2% by 2024.
The Bank of Canada’s recent interest rate hike was due to strong job, wage, and GDP growth over the third quarter of 2022, all of which can contribute to inflation. In January 2023, the bank indicated a pause in interest rate hikes.
Canada’s central bank concluded that data since the October monetary policy report reinforced their confidence that inflation would come down through 2023. Bank of Canada’s Governor Tiff Macklem has indicated that it will assess economic developments and be prepared to raise interest rates further if new evidence suggests inflation is not declining in line with their forecast.
The Canadian Real Estate Association (CREA) has not forecasted a quick decline in housing prices. CREA predicts that the average Canadian home price will recover by 3.5% to reach $685,056 by the end of 2023, which is on par with 2021 levels. According to CREA’s January 2023 report, national home sales have been reasonably stable since the summer, suggesting that the downward sales activity due to rising interest rates and uncertainty may be in the past.
The Bank of Canada believes that strong immigration rates and household formation will support the continued growth of the housing market. The Canadian government plans to attract nearly 1.5 million immigrants as permanent residents over the next three years, and all of these individuals will require a place to live.
Despite higher mortgage rates, some experts predict a shift from renting to buying. Compared to high rentals, monthly mortgage payments may be more attractive. In addition, there is a high possibility of buyers entering the housing market in the hope of a pause or cut in interest rates by the Bank of Canada.
What can You Expect from the Canadian Real Estate Market in 2023?
Although the Canadian housing market is experiencing a decline in home prices due to the recent key interest rate hikes, the market has historically been stable and resilient with a long-term upward trend. The current downturn in the Canadian economy is anticipated to be short-lived, with conditions expected to improve soon. The low-interest rates and housing supply shortage are driving up demand for homes, which could see the average home prices drop in most housing markets.
Potential homebuyers may want to take advantage of this opportunity to purchase a home while prices are low. The long-term outlook for the country’s housing markets remains optimistic, as the country boasts a strong economy, a stable political environment, and a growing population, which will continue to drive the demand for housing. As a result, buying a home in Canada is still considered a solid investment for the long term.
Canada’s housing market is predicted to recover in the coming years, making it a good opportunity for potential buyers to invest in Kitchener homes for sale.
Seek out experts such as mortgage brokers or real estate agents for guidance on finding the best mortgage rates and properties. Look into government initiatives like the home buyer’s plan to see if you qualify for any benefits.
When compared to other regions, Kitchener offers a competitively priced housing market. Moreover, its proximity to Toronto adds to its desirable location for homeownership. A long-term investment in Kitchener’s housing market can provide financial benefits for those who can afford a home purchase.