Happy New Year! This is the first market dispatch for 2026.

WATERLOO REGION

In 2025, the Waterloo Region real estate market shifted into a slower, balanced environment, marked by declining sales, rising inventory, and longer selling times. A total of 6,177 homes sold through MLS® in 2025, representing an 8.8% decrease from 2024.

December activity reflected this trend, with 306 sales—down year over year. New listings and listings in general although high, have been on the decline since September. Throughout the year broader economic uncertainty softened demand, resulting in fewer transactions and greater choice for buyers.

This shift created more favourable conditions for first-time buyers who were able to enter the market, as downward pressure on prices and reduced competition improved affordability relative to recent years.

Pricing trends in 2025 reflected this cooling market, with the year-to-date average sale price across all residential property types declining 3.7% compared to 2024. Condominium apartments experienced the most significant price adjustments, while detached, townhouse, and semi-detached homes also saw moderate year-over-year declines.

Overall inventory is at 2.3-month supply, with condos showing the highest inventory levels, which has been the case for some time..

Looking ahead to 2026, the market is expected to stabilize, supported in part by newly announced provincial and federal incentives—most notably the removal of HST on new homes up to $1 million for first-time buyers—which could help improve affordability and encourage renewed market activity, particularly among entry-level purchasers.

With interest rates likely holding creating market stability optimism remains for increased activity in the year ahead.

Market Outlook

The Bank of Canada’s next rate announcement is January 28th. Expectations are that rates will hold steady.

The sales to new listing ratio for December is at 81% due to a significant drop in new listings. Balanced is considered by the BOC to be between 40% and 60%.

Average days on market increased to 45 days. It’s important to note this number reflects only homes that actually sold and not the homes that didn’t or are still on the market.

Average sale to list price ratio is 99.1%.

Looking to make a move? In this market you need an experienced Realtor®. Contact me now whether buying or selling to move forward with confidence!

By the way, your referrals are the best compliment you can give. All sales through your referrals to me will see a portion of my commission donated to The Humane Society of Kitchener Waterloo Stratford Perth

Sell and move forward with confidence!

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Thanks for reading!

Lance