Concerns about a potential recession in Canada are prompting many prospective homebuyers to delay their purchases, according to a recent survey by BMO Capital Markets. The survey found that nearly 75% of those considering buying a home have adopted a “wait-and-see” stance—an increase from 60% in March—highlighting how economic uncertainty is dampening buyer confidence, particularly in Southern Ontario. In response to changing market dynamics, the Canadian Real Estate Association (CREA) revised its forecast for national home sales in April, predicting a marginal 0.2% increase year-over-year, down sharply from the 8.9% growth projected in January.
High interest rates were cited as the main obstacle for homebuyers in April 2024, with 72% saying they were holding off until the Bank of Canada cut rates. At the time, rate reductions had yet to begin, but policymakers soon embarked on a cycle of seven consecutive cuts, bringing the policy rate from 5% down to 2.75%. Despite this significant drop, many buyers remain cautious—38% say they are still waiting for rates to fall below 3% before entering the market.
Guelph had 51 condo sales in the month of April. This was a 9% decrease from March but down 45% from April 2024. The average sale price came in at $615,000, up 6% from the previous month but about the same year over year. The average time on market for condos that sold increased 17% from March to 38 days but a year ago Guelph condos were selling in 31 days on average.
Guelph sellers received 98.2% of their asking price on average although that doesn’t take price reductions into account. It just means that once homes were listed at the correct price, they sold close to asking. I believe this also shows that buyers were reluctant to make lowball offers, rather they waited for asking prices to come down before pulling the trigger. The same could be said for the 20% of condos that sold over asking price. Going into May there are 226 active listings. This represents 4.75 months of inventory if homes continue to sell at the same rate. Yikes!
It will be interesting to see how the market responds to being past the federal election and Carney’s meeting with Trump. Some stability may be all that is needed to perk up the usually hot spring market.
