Skip to content
Sponsored Content
This Content is made possible by our Sponsor; it is not written by and does not necessarily reflect the views of the editorial staff.

Half year review: Guelph real estate is still hot.

An eye on Guelph real estate as Canada’s market comes back down to earth
0
190718 Spotlight Waller1

At the start of the year, there was a great article written by MacLean’s implying that perhaps 2019 was the year of the housing market correction. The article discussed the beginning signs of correction and how the Government was likely going to raise interest rates two to three times in 2019.

This increase would put further pressure on already highly debt-ridden Canadians and could be the catalyst to dampen the real estate market. Higher rates, new mortgage stress tests would make it more difficult for first-time buyers, lower-income families and retirees to qualify for a new mortgage.

At the June rate discussion, the Bank of Canada held the overnight interest rate at 1.75% and so far this year this rate hasn’t increased at all. Some analysts suggested an increase could have been justified with a stronger Canadian economy and would provide a bit of a cushion if rates had to be reduced later in the year.

How has this impacted the Guelph real estate market in 2019?

Closer to home, Guelph home sales continued their upward trajectory, with the average price up 5% and the number of houses sold up 6% year to date through June versus 2018. Moneysense released an article in June identifying Guelph as the #2 city in Canada to purchase real estate based on various criteria.

Guelph continues to benefit from the “401 effect”, which outlines that the closer you get to the City of Toronto along the 401, the higher the price. And considering roughly 20% of Guelph buyers each month are coming from the GTA and are looking to cash out and get more for their money, there are plenty of buyers for our City’s homes which will push up prices.

But it works the other way too: many Guelph residents are moving further west and north to get more for their money in cheaper markets.

The challenge with this scenario is that Guelph is running out of affordable options. Homes that were once purchased at 2-3x income are now selling at 5-10x income or more due to increased demand for a limited supply. In 2019, there has only been one sale below the $200,000 mark, where this number was at 22 in 2017.

Only 70 more homes have sold so far in 2019 versus 2018 in Guelph, but it’s actually a decline of 210 homes sold versus 2017. The price bracket of homes selling at $350,000 or less has declined 20% over the past two years as the average price in Guelph picks up- that’s 180 fewer homes available under $350,000.

If you’re purchasing in the bracket of $550,000-$650,000, you’ve likely noticed there is a little more competition in Guelph as this price bracket has experienced an increase of 80 sales alone in 2019 - more than the total increase. If you’re a buyer in this price bracket, you may rightly feel frustrated at the competition. If you’re a seller in this bracket, discuss marketing strategies with your Realtor® to ensure that your home stands out from the rest.

As baby boomers decide to sell and downsize, they’re meeting head to head with either first-time buyers or young families deciding to upsize into their next home. This could explain the stagnant $750,000 plus market in Guelph as these boomers are faced with selling larger homes to a generation that are having smaller families.

Considering Guelph home prices continue to rise slowly, this does raise the question of affordability and options for younger, older and lower-income individuals to realize their dream of homeownership. If the market does soften as some predict, it’s quite likely we’ll witness a major migration of buyers to Guelph and sellers out of Guelph as everyone shifts to a more affordable market.

Beth and Ryan Waller are Sales Representatives with Home Group Realty. They can be reached at 519-546-3390, at their website bethandryan.ca or send an email to info@bethandryan.ca.

Source: GDAR data, Jan- June sales data 2017-2019. Excludes areas with less than 10 sales per year.

 

190618 Ryan Waller image 2

 

This Content is made possible by our Sponsor; it is not written by and does not necessarily reflect the views of the editorial staff.




Comments