Waterloo Real Estate Inventory Hits 9-Year High, but Prices Didn't Fall in March 2025 - Market Update

Waterloo Region Real Estate Market Update by Connor Graham

The Waterloo Region real estate market is shifting gears. March 2025 saw a 23.1% drop in home sales year-over-year, even as inventory surged to a nine-year high. But here’s the twist: prices are holding steady—or even climbing slightly month-over-month.

So what’s going on? Let’s break it down.

March 2025 Market Snapshot

Category	Stat	MoM Change	YoY Change
Total Sales	459 homes sold	↓ vs Feb	-23.1%
New Listings	1,180	↓ 2.4% (vs 10-year avg)	↑ 15.5%
Active Listings	1,700	+58.4% YoY	+72.9% vs 10-yr avg
Average Home Price	$771,915	+0.5%	-4.4%
Days on Market	28 days	↑ from 24 in Feb	↑ from 19 last year

What’s Driving The Waterloo Region Real Estate Market in This Update?

1. Inventory Surge = Buyer Power

There’s now a 3.2-month supply of homes available, up from just under 2 months a year ago. Condos are largely contributing to the rise of inventory, leading the pack with nearly 7 months of supply.

2. Prices Stabilizing

Despite slower sales, the average sale price rose 0.5% from February. Why? Detached and condo properties both saw month-over-month price increases—still down from last year.

• Detached: $921,985 (↑ 2.3% MoM)

• Condos: $457,925 (↑ 4.8% MoM)

• Townhouses: $622,231 (↑ 1.2% MoM)

• Semis: $663,145 (↓ 1.1% MoM)

3. Detached Homes Are Selling—Condos Are Sitting

Detached homes saw the most sales activity (259 units), though still down 24.7% YoY. Condo sales, meanwhile, dropped nearly 30%, and there’s almost 7 months' worth of inventory on the market.

TLDR: Investors and first-time buyers have room to negotiate in the condo market, while families looking for detached homes may face competition.

4. Interest Rates Are Dropping—Here’s Why That Matters

After holding firm for most of 2023, the Bank of Canada started cutting interest rates in mid-2024—and they’ve done it six times since July. The rate has dropped from 4.5% down to 2.75% as of March 2025.

TLDR: Borrowing is getting cheaper.That’s good news if you’re applying for a mortgage or refinancing—your monthly payments could be lower.

Lower rates could bring more buyers back into the market, especially first-timers and move-up buyers who were sidelined by high rates last year. These segments fuel the activity across the market.

5. U.S. Tariffs Might Make Building a Home More Expensive

The U.S. tariffs on Canadian products, and the counter-tariffs from our Government on U.S. products could have an impact on the cost of building in Canada.

What does that mean for you? Builders might slow down new projects or raise prices, depending how building costs are affected by this trade war. If new homes become more expensive, more buyers may continue turning to resale homes instead—adding pressure to the existing-home market.

Long-term effect: If new construction costs stay elevated, it's probable that home building will keep declining, leading to decreased inventory availability down the line.

🔍 MLS® Home Price Index: Long-Term Trends

Property Type	Kitchener-Waterloo	MoM Change	YoY Change
Composite	$728,800	-0.2%	-2.7%
Single Family	$843,300	+0.3%	-2.5%
Townhouse	$598,300	-0.3%	-3.4%
Apartment Condo	$434,200	-1.4%	-6.7%

Waterloo's Spring 2025 Market Outlook

Market Overview

Buyers are returning to the market, but they are cautious due to the upcoming election. Here are some key points to consider:

• Interest Rates: Falling rates boost buyers' confidence when purchasing.

• Increasing Inventory: More homes are available for sale.

• Market Equilibrium: A balance where both buyers and sellers can benefit.

Opportunities

The best homes are getting multiple offers. You can still find good deals by looking at homes that have been on the market for a while. These homes might be overpriced or not shown well. Overlook the negative views of a home that's been listed for a while, and assess whether it's a hidden gem.

Strategic Approach

Focus on the numbers, not emotions. Now is the time to align your strategy accordingly.

If You’re Buying:

✅ You have more choice and negotiation power than you’ve had in years for most properties

.✅ Condos and townhomes offer the best deals—especially in areas outside of K-W

⚠️ Prices are steady or rising in some segments, with competition on the best homes

If You’re Selling:

✅ Well priced and presented homes are selling quickly using a list-low, sell-high strategy

.✅ Detached homes continue to perform—especially under $800K

⚠️ Overpriced homes are sitting on the market