Western Surrounding GTA Area: September 2024 Real Estate Market Update
The western region surrounding the GTA Real Estate Market, comprising Guelph, Oakville-Milton, and Kitchener-Waterloo, demonstrated varying trends across the different municipalities, reflecting economic pressures. Residential SalesThe residential sales in August 2024 showed a decline in all three municipality-regions: Guelph, Oakville-Milton, and Kitchener-Waterloo.GuelphThe Guelph market experienced a 7.8% decrease in sales compared to August 2023, with 172 units sold in the month. This was 21.1% below the five-year average for the area, indicating weaker buyer demand despite continued interest in Guelph’s stable housing market.Oakville-MiltonThe Oakville-Milton area recorded 204 sales in August 2024, down by 5.1% year-over-year and 28.2% below the five-year average. Sales in this upscale market have been impacted by higher borrowing costs, leading to cautious behaviour among buyers.Kitchener-WaterlooThis region witnessed a more significant slowdown, with home sales down by 10.5% year-over-year in August, totalling 489 transactions. The Kitchener-Waterloo market has been particularly sensitive to rate increases, and sales were 26.3% below the five-year average for the month.Across all three regions, sales levels have been markedly below their historical averages, as rising interest rates continue to temper buyer activity.New Listings and InventorySupply-side activity varied across the Western surrounding areas of the GTA.GuelphNew listings in Guelph were down by 2.9% from August 2023, with 302 new residential listings hitting the market. Active listings in the region stand at 620, slightly above last year’s levels but still constrained compared to long-term norms.Oakville-MiltonThe Oakville-Milton market saw 421 new listings in August 2024, down 4.5% from a year earlier. The region currently has 825 active listings, as sellers remain hesitant due to uncertain price trends and buyer reluctance at current interest rates.Kitchener-WaterlooKitchener-Waterloo experienced a slight increase in new listings, with 759 properties listed in August 2024, a 1.8% increase compared to the same period last year. Active listings totalled 1,390, providing more options for buyers, although inventory remains below what is needed to balance the market.Inventory levels are mixed across these municipalities, with slightly higher listings in some regions while others face continued tight supply. However, buyer demand still appears subdued.PricesAverage prices in Southern Ontario have shown resilience despite declining sales, though price growth has softened across all regions.GuelphThe average home price in Guelph increased marginally by 1.1% year-over-year to $842,000. Detached homes remain the most sought-after property type, though affordability concerns are pushing more buyers towards townhomes and condominiums.Oakville-MiltonOakville-Milton continues to be one of the most expensive housing markets in Southern Ontario, with an average home price of $1.36 million in August 2024. This represents a 2.4% increase from last year. Detached homes in Oakville remain in high demand, although higher borrowing costs are keeping many potential buyers on the sidelines.Kitchener-WaterlooThe average home price in Kitchener-Waterloo was $805,000 in August 2024, a modest 0.8% increase year-over-year. Detached homes continue to be the dominant segment of the market, but the region’s lower price point compared to the GTA is attracting buyers priced out of other areas.Rental MarketRental markets experienced mixed trends in these areas, according to Zumper.GuelphGuelph’s rental market has tightened over the past year, with vacancy rates dropping to under 2%. The average monthly rent for a one-bedroom apartment is around $1,850, while two-bedroom units rent for approximately $2,400. Oakville-MiltonOakville-Milton’s rental market remains competitive, especially for units in transit-accessible locations. Vacancy rates are hovering around 1.8%, while rents for a one-bedroom apartment are now averaging $2,100. Two-bedroom units are renting for about $2,800. Kitchener-WaterlooKitchener-Waterloo’s rental market is similarly constrained, with vacancy rates under 2%. Average monthly rents for a one-bedroom unit have risen to around $1,950, and two-bedroom units are averaging $2,600. Employment TrendsGuelphGuelph experienced an unemployment rate: 4.7%, an increase of 0.8% from July 2024. This is 10.3% below the peak of June 2020 and remains below the long-term average. It had a total decline of 2,100 jobs in August 2024, comprising 1,200 fewer full-time jobs and 900 fewer part-time positions. Full-time employment is down 3,500 jobs compared to the peak in January 2024.Kitchener-Cambridge-WaterlooThe unemployment rate in this area was 7.1%, up by 0.6% from July 2024. This rate is 6% below the July 2020 peak but remains above the long-term average. The region lost 3,700 jobs in August 2024, including 2,700 full-time positions and 1,000 part-time jobs. Full-time employment is still down by 2,800 jobs from its peak in June 2024.TorontoToronto had an unemployment rate: of 8%, a rise of 0.3% from July 2024. This rate is 7.1% below the July 2020 peak but remains above the long-term average. Toronto added 3,800 full-time jobs but lost 1,300 part-time jobs, resulting in a net increase of 2,500 jobs in August 2024. Full-time employment is still down by 11,000 jobs from the peak in June 2023.Consumer ConfidenceConsumer confidence in Southern Ontario, including these three regions, is reflective of broader provincial trends, according to the Conference Board of Canada. In September, the Ontario-wide consumer confidence index remained cautiously optimistic, buoyed by stable employment numbers but tempered by inflation concerns and higher borrowing costs. The Bank of Canada’s interest rate hikes continue to impact buying power, and many potential homebuyers have opted to delay purchases, contributing to softer sales activity across the province.
Employment Trends Behind the August 2024 Labour Force Job Increases
Despite the recent apparent good news from Canada’s Labour Force Survey for August 2024, showing an increase in a net total of 22,000 jobs, some underlying trends behind those numbers raise concerns about the Canadian labour market. Job creation has stalled and unemployment figures continue to rise, as immediate and more long-term economic pressures suggest Canada’s labour market could face considerable challenges as it moves through the latter part of 2024 and into 2025.Stalling Job Creation and Rising UnemploymentAlthough there was a net increase of 22,000 jobs, full-time employment dropped by 44,000 – the largest single-month decline in the last two years – while part-time employment increased by 66,000. According to a September Edge Realty Report, this marks a notable shift in the job market, where for the first time since the pandemic, the annual growth rate of part-time jobs exceeded full-time employment, with 184,000 part-time jobs added compared to 132,000 full-time positions.The recent shift from full-time to part-time employment has hidden the concerning drop in full-time positions, as employers demonstrated a hesitancy to commit to long-term full-time hires, looking instead for part-time workers to maintain flexibility in their staffing. This results in a loss of greater job security, better benefits, and higher wages generally associated with full-time employment. The switch to part-time work could also put downward pressure on wage growth in the longer term, as part-time positions typically offer lower hourly rates than full-time roles.The unemployment rate also rose to 6.6% from 6.4%, which, while moderate, reflects deeper issues in the labour market. More critically, the number of Canadians unemployed for 27 weeks or longer surged by 85% year-over-year. This rise in long-term unemployment indicates that while layoffs have not occurred en masse, individuals who do lose their jobs are finding it increasingly difficult to re-enter the workforce.Also noted in the September Edge Realty report, over the past six months, the number of unemployed has increased by 15%; other than during the pandemic, the last time an increase of this level was seen was in 2009. This increase in unemployment and the lack of job creation has reached troubling levels. Canada’s Sahm Indicator, a key metric that tracks the three-month change in the unemployment rate, rose to 97 basis points. Historically, this level has been an accurate predictor of recessions.Long-Term Unemployment on the RiseAnother troubling aspect highlighted in the September Edge Realty Report is the rise in long-term unemployment. Long-term unemployed individuals—those out of work for 27 weeks or longer—are increasing at an alarming rate. Over the past year, this group has grown by 85%, signalling a deeper issue in the labour market. Once individuals find themselves unemployed for an extended period, it becomes significantly more challenging for them to re-enter the workforce, due to factors such as skill deterioration, a potential mismatch between their skills and the available jobs, and the stigma often associated with long-term unemployment.In August 2024 alone, the number of long-term unemployed rose significantly, contributing to the broader rise in unemployment. This is a concerning trend as long-term unemployment often leads to social and economic challenges, such as increased reliance on government assistance, heightened poverty rates, and a negative impact on overall consumer confidence.While outright layoffs have not yet occurred on a large scale, several indicators suggest that Canada could be at the beginning of an employment downturn. Employers typically curtail hiring before initiating layoffs, and the stalling of job creation may be a precursor to more significant cuts in the near future. A weaker labour market also tends to reduce consumer spending, which could, in turn, further slow down the economy.
What do Canadians want most in a home? Buyers still dream of renovated, suburban single-family houses
A new survey from Wahi that explored what type of home Canadians would most like to buy reveals that many homebuyers still dream of owning a renovated single-family home in the suburbs, despite ongoing affordability challenges. Single-family homes preferred among nearly two-thirds of homebuyers; most want suburban living The survey found that 64 per cent of potential homebuyers prefer single-family homes, particularly those that are larger, renovated and located in suburban (38 per cent) or urban (34 per cent) neighbourhoods. Three-bedroom homes were the most popular option (43 per cent), with only 28 per cent of respondents opting for rural living.What’s more, a previous Wahi poll found that despite elevated interest rates and home prices, about 20 per cent of Canadians say they’ll probably or may buy a home in 2024. Regional and demographic differences However, regional differences emerged. In provinces with more affordable housing markets, like Saskatchewan/Manitoba (82 per cent) and Atlantic Canada (77 per cent), the preference for single-family homes was even stronger. Atlantic Canada was also the only region where most respondents (58 per cent) wished to live in a rural area.Meanwhile, high-cost provinces like British Columbia saw a lower demand for single-family homes, with only 52 per cent of respondents choosing this option.“Canadian cities like Vancouver, Montreal and Toronto all have great urban cores with lots to do, so some potential homebuyers may also choose condominiums to be closer to the action,” explains Wahi CEO Benjy Katchen.Younger Canadians (18-34) are most likely to prefer single-family homes, with 67 per cent wanting this type of property, though they also prefer urban settings (34 per cent), while older generations (55+) are more inclined to downsize, with only 50 per cent choosing single-family dwellings. Turnkeys favoured over fixer-uppers When it comes to the condition of their future homes, the majority of Canadians (64 per cent) would prefer a renovated property, with older buyers (55+) especially drawn to turnkey homes to avoid the hassle of renovations.About 23 per cent would consider a fixer-upper, but only 2.0 per cent are interested in a complete tear-down. While the dream of homeownership has evolved, Wahi’s survey shows that Canadians still prioritize suburban living and single-family homes, even in today’s competitive real estate market. Enjoying this article?Get the latest REM articles in your inbox 3x week so you stay up to date on the latest in the Canadian real estate industry Success! Email Subscribe The post What do Canadians want most in a home? Buyers still dream of renovated, suburban single-family houses appeared first on REM.
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