Market Conditions: Where Are We Headed? The Evolving Role of Interest Rates in Home Affordability Interest rates have played a pivotal role in housing affordability over the past few years. Following a period of elevated rates designed to curb inflation, experts anticipate a gradual decline beginning in 2025. Should mortgage rates ease to approximately 3.5% for a five-year fixed term—with variable rates trending slightly lower—monthly payments will become more manageable, enhancing both affordability and buyer demand. As history has shown, declining rates typically fuel price appreciation—a dynamic that has repeated itself time and again in the housing market. Market Outlook: Price Trends & Inventory Home prices in Guelph and surrounding areas have remained resilient, with moderate single-digit growth projected for 2025. While certain markets, such as parts of Hamilton, may experience price corrections, areas with strong job markets and limited housing supply are expected to see continued appreciation, with year-over-year gains in the range of 4-6%. On the supply side, historically low inventory levels have challenged buyers, but an increase in new construction and seller activity could provide more options in the coming months. If more homes enter the market, buyers in Guelph and nearby areas may face less competition than in previous years—an advantage that may not persist in the long term. However, high-quality properties with superior square footage, larger lot sizes, and prime locations continue to attract strong demand, often receiving multiple offers, including cash bids. For buyers, securing the right property now could prove to be a strategic move before market conditions shift again. Is It the Right Time for You? Your Financial Readiness Before jumping into the market, assess your financial health: Do you have a solid down payment saved? Is your credit score strong enough for a favorable mortgage rate? Can you comfortably afford monthly payments, property taxes, and maintenance? The New First Home Savings Account is a great tool for saving for that first property be it investment or principle residence. If your financial foundation is strong, buying in 2025 could be a smart move, especially if rates decline and home prices continue to appreciate. Navigating Market Shifts: Federal Programs & Long-Term Strategies for Home Buyers New federal initiatives, such as the First Home Savings Account and updated Canadian Mortgage and Housing Corporation (CMHC) regulations allowing for minimum down payments on homes up to $1,500,000, aim to address affordability challenges in today’s market. These programs provide much-needed support for buyers looking to enter the market or move up the property ladder—especially in a landscape where elevated home prices have sidelined many prospective purchasers. Tom’s Final Thoughts: Should You Buy in 2025? While market fluctuations can create uncertainty, history has shown that time in the market consistently outperforms attempts to time the market. By prioritizing affordability and ensuring your purchase aligns with a sustainable, long-term strategy—whether as a primary residence or part of a broader investment plan—you position yourself for lasting success, regardless of short-term conditions. The decision to buy a home in 2025 will depend on a combination of market conditions and personal circumstances. If interest rates drop, inventory increases, and your financial situation is stable, buying could be a smart move. Thinking about buying in Guelph and surrounding area in 2025? Reach out to discuss your options and develop a strategy that fits your goals! POLICY INTEREST RATE The Bank of Canada (BoC) lowered the Policy Interest Rate on January 29th, 2025, balancing the need to contain inflation with supporting economic growth. The next Interest Rate Announcement is set for Wednesday, March 12, 2025. The BoC’s Policy Interest Rate is currently set at 3.00%.

This analysis focuses on student rental properties categorized by the number of bedrooms, price ranges, and parking considerations, providing insights into expected cash flow, appreciation potential, and additional factors for each type.