This month for GuelphToday, we look at 3 metrics for houses in the Guelph real estate market. The above video is a shortened version of the article below.
Although these videos are focused on Guelph, they are also applicable to most of the Ontario housing market.
But to answer the question, have $1 million houses left Guelph? More below, but the answer is: not yet, but they’ve had dessert and have asked for the bill.
What exactly happened in the Guelph real estate market in 2022?
There was a lot of change that happened in 2022. This is not only in Guelph, but the entire Ontario real housing market. This is especially true when you compare the first and 2nd halves of the year.
Looking back, the Guelph real estate market was an extreme sellers market in early 2022. With less than 50 listings and huge demand from Greater Toronto area buyers, it was hot.
GTA buyers leaving the big city and seeking a more suburban life with cheaper prices put strain on the entire Ontario housing market.
That started to cool off in April and May, as the Bank of Canada started raising interest rates. Buyers- mostly those from the GTA- started leaving Guelph. Prices quickly retreated to any Ontario housing market that was within a 2hr radius.
By July 2022, housing inventory in Guelph rose to over 300 available homes! That’s a sixfold increase in a matter of months!
Prices slid through the summer and into the fall. However, a lack of new inventory in September (a period of time where we normally see an increase) stabilized the market slightly.
The Bank of Canada continued to raise interest rates. 7 times in total in 2022 to be exact. The result is buyers are hesitant to jump into the market without conditions such as financing.
What neighbourhoods saw the largest impact in Guelph?
Downtown area homes overall had far less dollar sales than 2021. However, the average price rose- mostly in the 1st half of the year with the exception of St Georges Park.
This is likely due to limited land space. You can’t build more homes in downtown Guelph as there is no space. So, buyers need to buy what becomes available and often times that is at a premium.
South Guelph mostly had an increase in overall $ sold. This was mainly in the first half of the year. This was led by the Clairfields neighbourhood- however, it turned sharply in decline in 2nd half.
And again, like many other smaller centres in the Ontario housing market, it was mainly propped up by GTA buyers who reconsidered their move.
Best value neighbourhoods
In the 2nd half of the year we realized some steep declines in some areas, which may be the reason our team worked with a lot more first time buyers. These buyers, long frustrated with the real estate market decided it may be worth coming back to.
- Look at condos on Ajax and Westwood- these offer tremendous value
- Bungalows tend to sell at a discount to the same style in St Georges Park, although they’re the exact same style and age
- Watch West Acres for detached homes under $750K- they exist but you have to be quick
- This area is right next door to Guelph’s most expensive area of Kortright Hills, yet at a steep discount
- Look at condo buildings on Conroy and townhomes on Dovercliffe
- Detached homes here are great value relative to Kortright Hills and are very family friendly
Through the fall, many realized that although interest rates were rising, the price of houses were falling just as fast. The result? Monthly payments in fall 2022 are very comparable to that of the early months of 2022.
First time buyer tips
Jesse Giovinazzo from our team works with many first time buyers. A few tips he has from our first time buyer blog about buying a house include:
- Get a pre-approval: buyers should never be looking at houses without knowing what they qualify for. A buyer will need to do this eventually, so why not do it in advance so that you know what you can buy?
- Get re-approval. With all the changes in the market, what a buyer was qualified for in April 2022 is not the same in Jan 2023. First time buyers need to freshen up their pre-approvals
- Determine the source of your deposit and downpayment
- Consider closing costs
Have $1 million houses disappeared in Guelph?
Overall number of houses over $1 mill have increased. However, that’s misleading as it all happened in the first half of the year.
For context, here are how many houses sold at or above $1 million between Jan 1- Nov 30:
So looking solely at the total, it would appear that yes, $1 million homes are still strong in Guelph
But let’s give it some context
Like most of the Ontario housing market, the 2nd half saw a 50% decline in # of homes sold over $1 mill. So let’s look at the period of July 1- Dec 31 only:
That’s over 40% decline year over year! And, into mid January the slide continues:
Jan 1- 15, 2022: 17
Jan 1- 15, 2023: 2
Yes, only two in 2023 so far. We anticipate this decline will continue into the 2nd half of 2023.
Upcoming months of dramatic media headlines
As a result, most media outlets will have a hey-day with some of the dramatic numbers compared year over year. From January- April 2022, the Ontario housing market saw record home price increases. But, January- April 2023 will see a dramatic decline. This makes for a period of correction where the housing market is lapping 2022.
Take this with a grain of salt though. Using “average price change” and comparing simple months over months is not a true indication. That’s nothow the housing market works.
A better strategy? Look at the price of houses over a period of 15 years. You’ll find that 2023 will be an average year.
Get in touch
As always, if you have any questions on the Guelph real estate market get in touch with our team! We’re Guelph real estate agents who know the market well.