2020 Guelph Real Estate, Part 3: The Past and The Future

This is one year that I wish I had a crystal ball. In the past, the Guelph market was very steady. With an average growth of 5% -7% a year, it plodded along—not like our volatile neighbour market, Toronto, that would have wild swings, often doubling in 3-4 years. We saw some of that volatility in 2017 when a house in Guelph cost 30% of a house in Toronto and they came to Guelph in droves. Prices went up 30% in Guelph and bidding wars became the norm. It stopped at the end of May 2017 when Kathleen Wynne’s provincial government put in the absent-buyers tax of 10% and added the stress test. House prices in Toronto dropped 30% and Guelph no longer was as attractive to Toronto buyers. However, Guelph prices dropped only 10% and the market became steady again with fewer, crazy bidding wars.

Then came 2020. Supply continued to be low and the market started strong in January with bidding wars becoming the norm again. And then came Covid-19 and the lockdown in late March!

Though real estate was considered an essential service, most sellers pulled back from putting their homes on the market and many buyers decided to stay safe and stay home. Guelph continued to experience strong sales with an appreciation of 10% over 2019 but with fewer sales.  By June, we figured out that we could keep buyers and sellers safe and many employers decided to make working from home a long-term structure and, in some cases, permanent. Buyers flooded out of Toronto to other communities, including Guelph. Having a GO train and being only 1-ish hour from Toronto is handy in case someone needed to go into the Big City occasionally. If you had moved to Sault Ste Marie, for example, occasional commuting becomes an issue. Prices rose dramatically; a house in Guelph cost 35% more last month, than it did in January 2020. Now for the big question—what next?

As always, there are many predictions out there. CMHC certainly raised a few eyebrows when it predicted prices will fall 18% in 2021. The Canadian Real Estate Association’s Senior Economist, Shaun Cathcart, predicts a 9.1 % increase. The 6 top banks’ risk model shows real estate prices falling as much as 6.9% or rising as much as 11%.  All of this depends on the performance of the economy.

So what is a person to do? In short, there is no predictable outcome for our real estate market. Your best bet is always to hire a real estate professional, learn from them about market conditions at that precise time and for your neighbourhood, and discuss your personal real estate goals for a tailored plan of how to move ahead. In my next blog, I’ll discuss some of the ideal scenarios for selling your property.