Guelph Real Estate Market: What to expect in 2025

As we look toward the new year, several factors are shaping the outlook for the Guelph real estate market in 2025. Political shifts both domestically and internationally, as well as trends in the local market, will influence the direction of home prices, sales, and buyer sentiment.

Political Landscape and Economic Impact

Looking ahead to 2025, political changes are creating an atmosphere of uncertainty, both at home and across the border. With Prime Minister Justin Trudeau stepping down and the U.S. potentially welcoming a return of former President Donald Trump, there is speculation about how these shifts could affect the market. While uncertainty often leads to market caution, the transition away from Trudeau’s leadership could provide clarity that boosts buyer confidence in Canada.

On the other hand, Trump’s rhetoric regarding tariffs and protectionism may create some initial concerns. However, historical trends suggest that much of this talk may not result in substantial policy changes. For instance, the need to rebuild California following devastating wildfires might necessitate imports of Canadian softwood lumber, potentially softening the impact of any tariff threats.

What to Expect in 2025:

1. Modest Price Growth:

As inventory continues to recover from the low levels seen during the COVID-19 pandemic, we are anticipating a modest price increase of around 4-6%. This steady growth is supported by a gradual return of housing options to the market, which will provide more choices for buyers without overwhelming the market with excess supply.

2. Mortgage Renewals in Focus:

2025 will be a significant year for mortgage renewals, with approximately 1.2 million Canadians set to renew their mortgages. This wave of renewals is expected to bring some challenges, with a potential rise in delinquencies. However, the effects will likely be mitigated by softer interest rates and a competitive banking environment that continues to offer flexible terms. Homeowners renewing their mortgages in 2025 will need to be strategic in managing their financing to avoid financial strain.

3. A Balanced Market:

With interest rates stabilizing and inventory levels slowly increasing, 2025 is shaping up to be a more predictable year for the Guelph real estate market. After years of volatility, a balanced market is a welcome shift, creating opportunities for both buyers and sellers. This stabilization should encourage greater buyer confidence and provide more favorable conditions for sellers looking to enter the market.

Guelph's Real Estate Market: Key Takeaways from Q4 2024

Q4 2024 demonstrated that the Guelph real estate market remains resilient, with steady prices, rising sales, and returning buyer confidence. Let’s take a look at some of the key statistics and trends from the past quarter:

• Median Detached Sale Price: The median price for detached homes in Guelph saw a modest increase, rising to $850,000, up 1.18% from Q3 2024. This reflects a continued demand for homes in the area despite the broader economic environment.

• Number of Sales: There was a noticeable jump in the number of sales in the region, up 32.85% compared to Q3 2024. This uptick indicates that buyers are increasingly confident and ready to make purchases.

• Inventory: New inventory increased by 30.97%, which helped alleviate some of the pressure on the market, offering more options for buyers.

• Days on Market: The average number of days on market decreased by 12.20%, indicating that homes are selling faster, likely due to rising demand and more competitive pricing.

• Sales-to-Listing Ratio: Guelph’s market is balancing out, with a sales-to-listing ratio around 0.71, which falls within the range considered to be a balanced market. This further supports the expectation of a more stable and predictable market in 2025.

Guelph's Neighborhood Insights

The Waterloo Region and Wellington County have shown remarkable resilience throughout 2024. Key observations include:

• Midtown Guelph: The area is continuing its upward trajectory, with a notable increase in year-over-year (Y/Y) sales. The median detached price in Midtown is approaching the $1 million mark, and it’s expected that Q1 2025 could see it surpass this threshold.

• West Guelph: West Guelph experienced significant growth, with a 30% increase in inventory Y/Y. Despite this increase in listings, West Guelph’s homes continue to sell quickly, maintaining a sales-to-listing ratio above 1.

• South Guelph: Inventory in South Guelph decreased, which likely contributed to a 13.7% drop in Q/Q median detached prices. However, this is expected to be a short-term dip, with market conditions poised to recover in early 2025.

The Final Word

The real estate markets in Waterloo Region and Wellington County have proven to be resilient, with a steady increase in prices, more sales, and greater buyer confidence heading into 2025. As we move into the new year, there is optimism for a more balanced market, with steady growth and opportunities for both buyers and sellers to make strategic moves.

I remain committed to providing the insight, creativity, and local expertise you’ve come to expect. I am excited for what’s ahead in 2025 and look forward to helping you navigate the market with confidence.

Here’s to making 2025 another strong year in real estate!