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Are Guelph home prices going to drop by 18%?

Record household debt, increased mortgage defaults and increased unemployment all have a part to play
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If you’re following the headlines related to real estate, you’ve likely heard about the news release issued by the Canadian Mortgage and Housing Corporation (CMHC) regarding their forecasts for Canadian real estate. CHMC, Canada’s largest provider of mortgage insurance in Canada, estimates an incredible 9-18% decrease in the average home values across the country by 2021. 

Really? Does this apply to Guelph real estate prices? 

Although 18% would be a steep decline, Guelph may see declining prices in the next 12 months, much to buyers’ delight.

CMHC gave a variety of reasons why they believe the market will decline, including record household debt, increased mortgage defaults and increased unemployment. Interestingly, shortly afterwards CMHC also introduced new measures on qualifying credit scores and debt ratios for those with less than a 20% down payment as of July 1st, 2020. This will make it more difficult to qualify for a mortgage if insured by CMHC.

There are a few things to consider from this announcement. First, CHMC’s predictions are national, meaning that some areas may be impacted greater than others. Western Canada for example, is likely to be hit far harder than Ontario due to declining energy prices. Secondly, Guelph continues to see a huge influx of GTA buyers who are leaving the 416 and 905 for more affordable homes. And lastly, using average price as a key indicator is tricky and often misleading- it’s only one indicator of market health.

Average price is often used as a simple, easy to read metric within the real estate world. The average price of a home in Guelph has increased by over 9% this year, which seems like a pretty good statistic on its own. This could be because a greater number of higher-end homes have sold, or less entry-level homes have sold. It likely doesn’t mean that the average home in Guelph is worth 9% more than one year ago. 

Let’s take a look at what happens when you add a few more metrics:

•    Average price: +9%
•    Dollar volume (sales of all home prices added together) -7%
•    Number of homes sold -14% 

Now you can see that there is more to the story. In fact, there have been over 130 less homes sold this year than last year from January to May. This is significant information that is not taken into account when you look at average price. Does that change things for you?

The moral of the story is that Guelph homeowners deserve more detailed, factual information on the market.

Beth and Ryan Waller have produced the inaugural WallerReport, a short, easy to read and unbiased report which digs deeper into what is happening in the Guelph real estate market on a monthly basis.  

Whether you are clients of theirs or not, Beth and Ryan believe that everyone should have access to this information to help Guelph home buyers and sellers better understand the market from a neutral point of view, without obligation.

Considering the current market conditions, including a potential second wave of COVID-19, Beth and Ryan Waller predict that the average price of a home in Guelph will increase by 1-3% in 2020 and that overall dollar volume and number of homes sold will decrease in the range of 8-10%. They also predict more of a balanced market than today.

Where Guelph will gain in GTA buyers moving west, it’s predicted that we will lose in Guelph sellers moving out of town and from those who have postponed a move due to job insecurity and tighter qualifying restrictions.

Beth and Ryan Waller are Sales Representatives at Home Group Realty. You can reach them at 519-546-3390, by email at [email protected] or online at

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Source: GDAR data Jan- May 2019-20, single family residential homes, City of Guelph