Average Guelph home prices up in 2019 as numbers look to climb in the New Year
It’s often the first thing real estate clients ask: “How’s the market?”. This is such a hard question to answer because it could be addressed in many ways. Information on the Guelph real estate market is everywhere and depending on what you’re looking for, you’re going to get mixed messages.
At the beginning of the year, Beth and Ryan Waller estimated that the Guelph real estate market would be similar to projections of Toronto at a 1-3% growth rate. This considered a few interest rate hikes by the Bank of Canada. However, these rate increases did not happen as expected and the real estate market remained strong.
Just how strong was the Guelph real estate market this year?
Both the Guelph and Toronto markets performed stronger than anticipated. The average price of a single-family residential home in Guelph has increased 6% in 2019 versus 2018, beating a 1-3% projection.
As anticipated in this January 2019 GuelphToday Spotlight, Guelph’s growth has come mainly from the $400,000 -$500,000 price bracket as first-time buyers continued into the market and bought up lower-priced homes. In fact, as the Canada Mortgage and Housing Corporation (CMHC) mentions, 47% of new mortgages in 2019 were from first-time homebuyers. This is down versus 2018 but still very strong. The competition and scarcity in this price bracket are pushing some buyers to consider other options besides detached homes within Guelph (condominiums or townhomes), or potentially moving further west or north where home prices are slightly less.
Larger homes and homes priced higher than $800,000 took a little longer to sell this year, in particular in parts of South Guelph. As many baby boomers decide to sell their family homes and downsize, there is less of a market that can afford homes in this price range.
In the past few months, a decreasing supply of active listings in Guelph has resulted in buyer frustration. As of December 12, there are only 148 active listings in Guelph, which is less than the total number of houses sold in November alone. This dangerously low supply is resulting in higher selling prices and we see that pattern continuing over the next few months.
Hot spots in Guelph
The City of Guelph is made up of a variety of neighbourhoods, each with their own dynamics and influences- from schools to businesses, to transit and more. The neighbourhoods to watch for were those that had more affordable pricing versus other areas of Guelph and/or those styles of homes that appeal to a wider range of buyers.
Onward Willow/Junction was showing signs of revitalization last year and continued that strength this year. With home prices lower than the city average and appealing areas of bungalows, Onward Willow grew by 9%.
The Ward, with new condo and townhome developments, is now starting to show signs of revitalization that could push further east. The Ward led the City’s growth with a 21% average price increase in 2019.
Where is the Guelph real estate market going in 2020?
It’s anticipated that the Bank of Canada will hold rates at current levels for the majority of 2020, and with a strong local economy, it can be predicted that the Guelph market will increase 5-7% on an average price basis.
Condominiums will continue to gain share of total sales, as first-time homebuyers and downsizers take advantage of the convenience and amenities that condos offer. 2020 will also be the “year of the bungalow”, specifically those areas with many of the post-war brick bungalows.
In terms of area growth, the following areas look to outpace city growth in 2020: Riverside Park, Onward Willow, The Ward and St. Georges Park.
*Source GDAR single-family residential sales, 2018-19