March 2025 Real Estate Update

In February, 363 homes were sold in the Waterloo Region through the MLS® System, marking a 26.1% decrease from last year and a 38.8% drop from the 10-year average for the month.

Market Trends and Insights

February’s home sales were impacted by economic uncertainty, concerns over employment, and heavy snowfall, which created challenges for buyers and sellers. However, we’re seeing positive signs, including a rise in new listings, steady home prices, and ongoing mortgage pre-approvals.

Sales Breakdown and Price Trends

• 221 detached homes sold (down 21.9%) – Average price: $900,003 (+1.0% from Feb 2024, +2.1% from Jan 2025).
• 71 townhouses sold (down 36.0%) – Average price: $613,924 (-2.7% from Feb 2024, -2.6% from Jan 2025).
• 23 semi-detached homes sold (down 4.2%) – Average price: $670,352 (-0.5% from Feb 2024, +6.6% from Jan 2025).
• 47 condo apartments sold (down 35.6%) – Average price: $437,000 (-5.8% from Feb 2024, -7.2% from Jan 2025).
• The overall average home price in Waterloo Region was $767,800, up 1.3% year-over-year and 1.8% from January.

Inventory and Market Supply

• 858 new listings in February, up 7.3% from last year and slightly above the 10-year average.
• 1,450 active listings at month-end, up 55.7% from February 2024 and 68.7% above the 10-year average.
• Total inventory grew by 52.9%, reaching a 2.6-month supply across all property types:
  • Condo apartments: 5.9 months’ supply
  • Townhouses: 3.6 months’ supply
  • Detached homes: 1.8 months’ supply

The average time to sell a home was 24 days, down from 34 days in January, matching the 24-day average from February 2024 but still above the five-year average of 15 days.

Bank of Canada Rate Announcement and Its Impact on the Market

On March 12, 2025, the Bank of Canada (BoC) reduced its policy interest rate by 25 basis points to 2.75%, marking the seventh consecutive rate cut in nine months. This decision was influenced by escalating trade tensions with the United States, which are expected to slow economic activity and increase inflationary pressures. ​

The reduction in the policy rate is anticipated to make borrowing more affordable, potentially boosting buyer demand as the spring housing market—the busiest season historically—commences. In January 2025, the BoC had already lowered rates from 3.25% to 3.00%, and further cuts are expected throughout the year.

Spring Market and Rate Cuts Could Boost Buyer Activity

As we navigate the shifting market, it’s important to note that while sales are down, the rise in inventory presents great opportunities for buyers. If the Bank of Canada lowers rates in March as predicted, we could see increased buyer demand just as the spring market ramps up. With more buyers actively searching, sellers who list early in the season may benefit from stronger interest and more competitive offers.