With interest rates continuing to rise, the average cost of buying a home in the area continues to fall, according to the Kitchener-Waterloo Association of Realtors.
After the average price peaked at $1,007,109 in February, it has fallen for three straight months, dropping to $875,194 in May.
While this continues to be a step in the right direction for home buyers, the price is still 18.3 per cent higher than in May 2021.
The average cost of buying a detached home in the area has fallen more than $200,000 since February but was still clocking in at $1,016,834, which is up 18.3 per cent over a year earlier.
Initial rate hikes of 25 basis points in March followed by 50 basis points in April have cooled real estate prices in many areas.
“The increase by the Bank of Canada to the key interest rate in April had the predictable result of knocking some buyers down if not out of the market in May,” says Megan Bell, president of KWAR.
“While the impact to prices is small, it has had a critical impact on some buyers and what they can now afford.”
The rate was lifted again on Wednesday as the days of nearly free loans from banks may be in the rear window.
“With the announcement from the Bank of Canada about another interest rate hike this week we may see a resurgence of buyers who have locked in at a lesser rate, but as borrowing costs continue to increase, we should expect demand will continue to soften, particularly in the more entry-level segment of the market,” Bell said.
While the cost of buying a home continues to fall in the area, the realtors say 661 homes still changed hands in the Kitchener-Waterloo market in May.
KWAR says that is a 22.7 per cent decrease from last May and 5.5 per cent below the five-year average.
That total includes 404 detached houses, 115 townhouses, 95 condos and 47 semi-detached homes.
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