TORONTO-New data from the Cornerstone Association of Realtors reveals a significant slowdown in the Waterloo region’s housing market throughout 2025. Total home sales for the year hovered around 6,000 units, marking a nearly 9% decline compared to 2024 and falling roughly 25% below the ten-year average. While the market remains well-supplied with inventory, a combination of economic uncertainty and high borrowing costs has kept many potential buyers on the sidelines, leading to homes sitting on the market for longer periods. The average time to sell a property increased from 36 days in late 2024 to 45 days by the end of 2025.
Despite the sluggish sales volume, the shift has created a more favorable environment for first-time homebuyers. Average residential prices in the region have softened to approximately $713,000, a decrease of over 5% from the previous year. To further stimulate the market and assist new entrants, the federal government introduced a significant tax incentive in mid-2025. This measure eliminates the federal portion of the Harmonized Sales Tax (HST) for first-time buyers on newly constructed homes valued up to $1 million, offering potential savings of up to $50,000.
Industry experts believe these government interventions, combined with stabilizing interest rates, will lead to a more balanced market in 2026. Christal Moura, a spokesperson for the Cornerstone Association of Realtors, noted that the increased choice for buyers and new tax relief measures are expected to gradually restore consumer confidence. While the market currently leans in favor of buyers, officials hope that the combination of lower entry prices and federal tax breaks will encourage more residents to transition into homeownership in the coming year.
