The president of the Guelph and District Association of Realtors sees the local real estate market returning to normal next year.
A recent survey by Royal LePage is predicting a one per cent drop in the aggregate price of a home in Canada by the fourth quarter of 2023, to an estimated $765,171. That's a drop from the $772,900 for Q4 this year.
Broken down, it's seeing a two per cent decline in aggregate housing prices in the Greater Toronto Area, from $1,078,300 to $1,056,734.
The report didn't discuss Guelph specifically in its forecast, but local association head Tyson Hinschberger noted Guelph and southern Ontario is always influenced by the GTA market.
So what does this all mean for Guelph?
"Certainly I think that at the end of the day, it speaks more to a return to normalcy and stability than probably a lot of the frenzy that we've seen over the last 12 to 18 months," he said.
Speaking on behalf of the association, he believes the worst is behind us, and there seems to be more of an interest in buyers at least exploring making moves.
"I've spoken to a few people about making upsizing decisions or buying that second property lately," said Hinschberger, who is also a real estate broker with Planet Realty.
"That's anecdotal, but if you look at statistics across Wellington region, we've seen average prices, days on market and months of inventory, which we use to determine whether we're in a buyers, sellers or a balanced market. They've all been pretty level since about the end of August.
"The declines that we had seen in the middle six months of the year, those have levelled off to a relatively balanced scenario."
But there is a question mark for first-time buyers, and it's all about timing and the interest rate.
"Variable rates have surpassed fixed rates in terms of their pricing, so what that suggests is that any future rate increases by the Bank of Canada would have less of an effect on the market because a buyer can opt into a fixed rate, which is determined by bond yields rather than the overnight lending rate," he said.
Hinschberger said we're in a better situation now than the summer, adding it's easier to make plans to move in the balanced environment rather than a market that severely favours buyers or sellers.
But wanting to buy a house is one thing. It's another to take a look, and it's no secret there is a lack of supply being felt across this part of the province.
On supply and demand, Hinschberger said a supply shortage would suggest an increase is imminent to the prices of homes because more want homes than the supply available.
And even though we've seen changes made by the government to bring supply to market – most notably the controversial Bill 23 – Hinschberger said these things don't happen overnight.
In Guelph, the province wants to see 18,000 new residential units built by 2032 as part of Bill 23.
Looking further down the line, the province has a target Guelph will grow to a population over 200,000 by 2051.
"You have a new permanent resident target of around 465,000 people next year (across Canada), and that supply will take a while to come to fruition," he said. "It won't provide immediate relief to that supply shortage. To the extent that the interest rate environment is still volatile, how much demand there is for that supply is still somewhat up in the air."
