With the arrival of spring, the markets in the City of Guelph and Wellington County are exhibiting similar rejuvenation and liveliness. After a volatile 2023, where consumers continued to adjust to inflation, rising interest rates, and a somewhat uncertain future, the Wellington County real estate market also adjusted. Average prices were inconsistent throughout the year. 

They peaked in June and then fell throughout the rest of the year, ending with a small net year-to-date gain. 2023 ended up being the slowest national real estate market in 22 years. 

2024 has had a sluggish start, but with improving weather activity is ticking up. As a result, our numbers for our first quarter are relatively flat compared to the same period last year but there are signs of momentum and optimism.

The Canadian Real Estate Association (CREA) reports that March 2024 sales are about 3% higher than March 2023, with 355 units changing hands in Wellington County. Sales are below the 5-year and 10-year averages by 23.9% and 20.2%, respectively. Take that with a grain of salt. It’s important to note that these periods have been greatly influenced by some of the busiest real estate markets we have ever seen in 2016, 2017, 2021, and 2022.  

First-quarter dollar sales volumes were also down slightly by 6.2% in Guelph and Wellington County. Guelph also saw an 8.6% drop in unit sales while Wellington County saw a 6.5% decrease in the first quarter overall. 

However, despite lower sales activity, prices are steady, with the average price in Wellington County at $808,877, up 0.81% from March 2023. In Guelph, average prices are at $785,132, which is up from last March by 3.68%, based on data collected from the Guelph and District Association of REALTORS®. 

While these numbers indicate a flat market, overall listings are up 17%, and we are seeing signs of increased activity overall. Competition for certain properties is up, some open houses are quite busy, and overall real estate activity appears to be gaining momentum across the County. 

The Bank of Canada again held overnight lending rates on Wednesday, April 10th at 5% and should help increase consumer confidence. The overnight lending rate affects short-term credit and financing and variable-rate mortgages. Inflation did tick down slightly in February to 2.8% bucking predictions and the Bank’s current policies seem to be working to tame inflation.  

There is no immediate rate cut planned by the Bank and Buyers are unsure when one might be coming. The Bank of Canada is worried about cutting rates and stoking the real estate market which would lead to higher prices and contribute to inflation. Shelter costs already make up approximately 6% of inflationary pressure. 

My feeling is if the economy remains consistent and there are no further shocks to the system we will see a rate cut sometime this summer. Furthermore, the City of Guelph and Wellington County continue to be anchored by a strong economy. Last month the City of Guelph posted a 3.8% unemployment rate, one of the lowest rates in the country compared to a 6.1% national unemployment average. 

Given the prospect of lower rates, a strong economy, and significant pent-up demand, we expect the real estate market to gain momentum throughout the spring and well into the fall. As a result, we will see a steady increase in prices and a steady real estate market overall, leaving behind the volatility of 2023.