October's headline is that Waterloo Region home sales fell 11.5 percent from a year ago. The more useful number is hidden underneath it: months of supply fell at the same time, which can only happen if listings dropped faster than sales. Sellers are stepping back before buyers come back. Add a Bank of Canada rate increase that almost nobody expected a year ago, a CREA forecast that has been cut three times in 2026, and a construction pipeline that is being approved but not started, and you have a market that is quieter than the price data alone would tell you.

Waterloo Region housing market at a glance

• Sales: 506 homes in October, down 11.5 percent from October 2025 and up 21.6 percent from September [1]
• Year to date: 4,978 sales through October, down 7.9 percent from 2025 and 15.5 percent from 2024 [1]
• Median price: $670,000, down 2.9 percent year over year and about 30 percent below the February 2022 peak of $955,000 [1]
• Average price: $724,468, down 0.5 percent [1]. Price per square foot: $355, down 7.3 percent [1]
• Months of supply: 3.6, down from 3.9 a year ago, with condos at 7.0 and semi-detached at 1.8 [1]
• Bank of Canada: policy rate raised to 2.50 percent on October 28, the first increase since July 2023, with the Bank saying further increases may be needed [2]
• CREA: national sales down 7.7 percent year over year in September, and the 2026 forecast cut for the third time, to a 5.2 percent decline [6]
• Jobs: Kitchener-Cambridge-Waterloo unemployment eased to 7.7 percent in September from 8.2 percent, still above the national 6.5 percent [7]
• Water: the Mannheim side stream pilot came online October 10, adding 20 litres per second [12][13]

Figures reflect ITSO InfoSparks data as of November 4, 2026, covering October 2026 activity. Charts are interactive, and each chart has a written data summary beneath it. Year-to-date and peak-to-trough figures are calculated from the monthly ITSO series.

Waterloo Region home sales in Octobefr 2026

The seasonal bounce was bigger than usual, and it still fell short

October sales came in at 506, up from 416 in September [1]. A September-to-October rise is normal in this market. What stands out is the size: 21.6 percent this year, against 12.6 percent in 2025 and 15.8 percent in 2024 [1]. Some of that is buyers who waited through a dead September, and some is a reaction to the rate increase, since a hike tends to pull forward anyone holding a pre-approval. A bounce that strong off a base that weak is not a recovery signal on its own.

The year-to-date picture is clearer. Through October, 2026 has produced 4,978 sales, against 5,407 in 2025 and 5,893 in 2024 [1]. Unless November and December beat last year, 2026 will be the slowest year in this series.

Sales by property type

Single family sales fell 7.0 percent, townhouses 15.4 percent, semi-detached 12.2 percent and condos 30.5 percent [1]. Condo counts are small enough that one slow month can swing the percentage, so treat the direction as real and the size as approximate.

The order matters more than the percentages. The segments with the deepest declines are the ones where buyers have the most substitutes and the least urgency. A first-time buyer choosing between a condo and renting another year is not forced to act. A family that has sold and needs a house is. That is why single family sales are holding up best even though those buyers carry the largest mortgages.

Waterloo Region home prices: three measures, three answers

The median sale price was $670,000, down 2.9 percent from $690,000 a year earlier [1]. The average was $724,468, down only 0.5 percent [1]. Price per square foot was $355, down 7.3 percent [1]. Those three numbers describe the same month and they disagree, so it is worth being clear about why.

The average is held up by the top of the market, where a handful of larger sales carry a lot of weight. The median is the middle of the pack and is the better guide for a typical home. The per-square-foot number strips out size, and its steeper drop says buyers are paying less for space even where headline prices look steady. The most likely reading is that the mix of what sold tilted toward larger homes, which flatters the average and the median while the price of a given square foot kept slipping. If you own a typical home, the per-square-foot figure is the one closest to your experience.

By type, single family homes held up best at $750,000, down 5.7 percent. Semi-detached came in at $572,000, down 3.9 percent. Townhouses fell 12.5 percent to $538,000 and condos 17.1 percent to $340,000 [1].

The longer view puts October in context. The median peaked at $955,000 in February 2022 and has fallen about 30 percent since [1]. It has moved within a narrow band between roughly $665,000 and $700,000 for the past 14 months [1]. That is not a crash. It is a market that has found a level and is drifting slowly lower within it, with each year's spring high a little below the last.

Nationally, CREA's September data shows the average price down 1.6 percent year over year and its price index down 3.4 percent [6]. Waterloo's median decline sits between the two, so on price the region is tracking the country. On volume it is not: CREA reported national sales down 7.7 percent in September, against 11.5 percent here in October [1][6].

For landlords and investors: A lender's appraisal follows the comparables, not the headline. For a condo or townhouse bought in 2021 or 2022, the gap between the purchase price and today's value is now wide enough to matter at renewal, when a lender re-tests loan-to-value. Know the number before the lender tells you.

Months of supply: why falling inventory is not good news yet

Supply stands at 3.6 months, down from 3.9 a year ago [1]. In a normal year, falling supply means demand is absorbing inventory. This year it means something else. Sales fell 11.5 percent, so for months of supply to fall as well, active listings had to fall by more than that. Sellers who do not have to sell are not listing, and some who listed over the summer have pulled their homes rather than cut the price.

That matters for how the next six months play out. A market with weak demand and shrinking supply does not collapse; it stalls. Prices hold because there is nothing forcing them down, and sales stay low because there is little to buy at the price buyers will pay. The thing that breaks a stall is usually a wave of forced listings, from job losses, mortgage renewals or estate sales, and that has not arrived.

By type, single family homes are at 3.1 months and semi-detached at 1.8, both balanced to tight [1]. Townhouses are at 4.3 and condos at 7.0 [1]. Seven months is buyer's market territory by any definition, which is why condo prices are falling while single family prices only drift.

The Bank of Canada hike and what it changes for mortgages

On October 28 the Bank of Canada raised its policy rate by a quarter point to 2.50 percent, its first increase since July 2023 [2]. The reason was inflation. The Bank now expects inflation of about 3.4 percent by the end of 2026, up from the 2.4 percent it projected in July, driven mainly by energy prices and by businesses starting to pass costs through to consumers [2]. Governor Macklem said there could be a need to raise the rate further and that the Bank will decide one meeting at a time [2].

The economists who follow the Bank do not think this is the last move. Desjardins expects one more increase before the cycle ends [2]. TD forecasts a move to 2.75 percent in the first quarter of 2027, and CIBC expects a hold in December followed by an increase in January [3]. RBC called the hike preventative medicine, meant to stop inflation expectations from drifting higher rather than to cool a hot economy [3]. The next decision is December 9 [4][5].

Here is the part that matters for a buyer or an owner renewing. Two-year bond yields barely moved after the announcement, because the market had already priced in the increase [3]. Fixed mortgage rates follow bond yields, so a five-year fixed quoted today already reflects this hike and some expectation of the next one. Variable-rate borrowers felt it immediately. If you are renewing in 2027, the question is not what the Bank does in December but where five-year yields sit on the day you sign, and that depends on whether inflation does what the Bank now expects.

For investors: Variable-rate and short-term commercial debt reprices with the policy rate. A quarter point on a $2 million mortgage is $5,000 a year before amortization effects. Run your debt-service coverage at 2.75 percent, not 2.50, and treat anything that only works at 2.25 as a deal that has already changed.

CREA's forecast has been cut three times. Here is why that matters locally

In January, CREA expected national sales to rise 5.1 percent in 2026. In April the forecast was a 1 percent gain, in July a 1.4 percent decline, and on October 16 a 5.2 percent decline to 444,530 sales [6]. The 2026 average price is now expected to be flat, up 0.2 percent, with a 1.2 percent gain in 2027 [6]. Each of those cuts came as the rate outlook worsened. In January the market expected cuts; by October it had an increase.

The lesson for Waterloo Region is not the national number itself but the direction of revision. Every forecast this year has been too optimistic, and the thing that keeps breaking them is rates. CREA's senior economist put it plainly: until the Bank's path becomes clearer, this fresh round of uncertainty will likely send some buyers back to the sidelines [6]. Our October numbers show that already happening, with the region's sales decline running ahead of the national one.

Employment and trade in Kitchener-Cambridge-Waterloo

The region's unemployment rate was 7.7 percent in September, down from 8.2 percent in August and from a high of 8.7 percent in May, but still well above the national 6.5 percent [7]. Statistics Canada's city figures are three-month moving averages from small samples, so the improvement is encouraging rather than conclusive [7]. Guelph was at 6.5 percent and Hamilton at 6.9 [7].

The United States took tariff action effective August 22, and Canada's counter-tariffs took effect September 8, 2026 [8]. The Bank itself cited those counter-tariffs as one reason its inflation forecast rose [2]. For a region built around manufacturing and technology, trade policy is now feeding into both sides of the housing equation: it weighs on jobs, which weakens demand, and it lifts prices, which keeps rates higher. That combination is why unemployment and inflation can both be elevated here at once.

Jobs are the link between all of this and housing. A household unsure of next year's paycheque delays a purchase, and the forced listings that would normally follow a weak labour market have not shown up in the supply data yet. For landlords, the same pressure arrives earlier and more quietly, as slower rent collection and longer time to re-lease a vacant unit.

Population growth stopped. Household formation did not

The Region's year-end bulletin reports population growth of fewer than 100 people in 2025, against a five-year average of about 10,868 a year and 28,490 as recently as 2023 [9]. The number of households still grew by 3,720 [9]. Those two figures together are the most important demographic fact in this report.

Population growth stopping means the newcomer demand that filled rental units and starter condos from 2022 to 2024 is largely gone. Household growth continuing while population is flat means existing residents are splitting into more households: adult children moving out, couples separating, older owners living alone longer. That kind of household wants a different home than a newcomer does. It is less likely to be a first-time condo buyer and more likely to be a renter of a one-bedroom, a buyer of a townhouse, or a downsizer. The condo weakness in this report has a demographic cause as well as a rate cause, and the demographic one will not reverse when rates do.

For landlords: Vacancy in purpose-built and condo rentals that leaned on international students and new arrivals will take longer to fill, and asking rents are the lever that fills them. Buildings serving established residents, especially family-sized units near transit and schools, are better insulated.

Construction and water capacity: approved, but not started

The new home pipeline

CMHC's September data shows 1,250 approved units awaiting construction in Kitchener-Cambridge-Waterloo, nearly double the 656 recorded in June [10][11]. Over the same four months, units under construction fell from 8,052 to 6,820, and completions ran at 168, 563, 951 and 176 [10][11].

Read those two lines together. Approvals are stacking up while active construction shrinks, which means builders are getting permission and then not breaking ground. Three things explain that: financing costs that just went up, presale thresholds that are hard to hit in a market with 7.0 months of condo supply, and water allocation. The result is a completions pipeline for 2027 and 2028 that is thinner than the approvals suggest. That is bad news for anyone hoping new supply will push prices lower, and quietly good news for owners of existing homes and rental buildings in serviced areas.

Mannheim Service Area water capacity

Water is the constraint that decides which approved projects can actually proceed. The Mannheim Service Area, which covers Kitchener, Waterloo and part of Cambridge, has been under a capacity constraint that limits development approvals [12]. On October 10 the Region's side stream pilot at the Mannheim plant came online, adding 20 litres per second, on top of about 10 litres per second from well optimization earlier in the year [12][13][14].

The Region's own timeline shows the real capacity arriving later: a side stream stage 2 of up to 250 litres per second planned for summer 2027, conditional on the pilot performing, then Maple Grove and the Grand River wells system by 2032 [14]. Cambridge adopted a water allocation policy on July 21, 2026 that requires confirmed capacity before certain approvals proceed [15]. The Region's interim risk management framework, which lets some projects move forward in stages, expires June 30, 2027 [16].

The dates line up in an uncomfortable way. The framework expires the same summer the stage 2 capacity is supposed to arrive. If the pilot performs, the two hand off cleanly. If it does not, the region enters the second half of 2027 with the constraint still in place and the interim rules gone. For buyers of new construction, that is a reason to ask a builder specifically whether a project's water allocation is confirmed. For apartment owners, it is a reason the existing rental stock in Kitchener and Waterloo will stay scarce longer than the approval numbers imply.

What the October data means for buyers, sellers and owners

For buyers: Your leverage is in condos and, to a lesser extent, townhouses, where supply is high and sellers who are still listed are the ones who need to sell. In single family and semi-detached homes you have less room than the headlines suggest, because there is less to choose from than a year ago. Lock a fixed rate quote before December 9 if you are close to a decision; the hike is already in the quote, and a surprise either way moves it.

For sellers: If you can wait, you are already waiting, and so is everyone else, which is why supply is falling. If you cannot wait, price to the per-square-foot number rather than to your neighbour's 2025 sale, and expect that the buyer's lender will do the same. The homes that are selling are the ones priced for this market on day one.

For owners renewing in 2027: Budget for 2.75 percent, not 2.50, since that is where TD, CIBC and Desjardins now see the policy rate heading. Compare your renewal offer against five-year bond yields on the day, and remember that a lender who re-tests loan-to-value on a condo bought in 2022 may ask questions it did not ask at the last renewal.

For investors: The best protection in this market is an existing building in a water-constrained area with tenants who are established residents. The most exposed position is a 2022 condo purchase with a variable mortgage and a student tenant. Most portfolios sit somewhere between, and the October data says to find out which end you are closer to.

Frequently asked questions about the Waterloo Region housing market

Are home prices falling in Waterloo Region?

Yes, but by less than the sales decline suggests. The all-property median was $670,000 in October 2026, down 2.9 percent from a year earlier, while the average price was flat at $724,468 [1]. The median is now about 30 percent below the February 2022 peak of $955,000 [1]. Condos and townhouses fell the most; single family homes fell 5.7 percent [1].

Is Waterloo Region a buyer's market?

Only in condos. Condo supply is 7.0 months, which is buyer's market territory. Single family homes sit at 3.1 months and semi-detached at 1.8 months, which is balanced to tight [1]. Across all types, supply is 3.6 months and has fallen from 3.9 a year ago because listings dropped faster than sales [1].

Will the Bank of Canada raise rates again?

The Bank raised its policy rate to 2.50 percent on October 28, 2026, and said there could be a need to raise it further [2]. Desjardins expects one more increase, and TD and CIBC both expect a move to 2.75 percent in early 2027 [2][3]. The next decision is December 9, 2026 [4][5]. This article does not forecast that decision.

How does Waterloo Region compare with the national housing market?

Waterloo's sales decline is steeper. CREA reported national sales down 7.7 percent year over year in September 2026, against 11.5 percent in Waterloo Region in October [1][6]. Prices are closer: CREA's national average fell 1.6 percent and its price index fell 3.4 percent, against a 2.9 percent decline in Waterloo's median [1][6].

When will Waterloo Region add more water capacity for new housing?

The Region's side stream pilot added 20 litres per second on October 10, 2026 [12][13]. A stage 2 of up to 250 litres per second is planned for summer 2027, conditional on the pilot's performance [14]. The interim risk management framework that lets some projects proceed in stages expires June 30, 2027 [16].

Conclusion

October's market softened on volume and held on price, and the reason it held is that sellers left before buyers did. That is a stall, not a slide. What ends a stall is either a reason for buyers to return, which would be a clearer rate path, or a reason for sellers to list, which would be forced sales that have not materialized. The next data points on both are the December 9 rate decision and the labour force numbers that follow it. Underneath, two slower stories are shaping the next several years: a population that stopped growing in 2025 and a construction pipeline that is being approved faster than it is being built. Both favour owners of existing homes and buildings over anyone waiting for new supply to change the math.

About the Author: Terry Riddoch, Ontario Multi-Family and Commercial Real Estate Broker

Terry Riddoch is a licensed Ontario real estate broker with Re/Max Real Estate Centre, based in Waterloo Region and specializing in multi-family and apartment building sales across Ontario. With 19 years of experience and over $90 million in closed transactions, he advises independent landlords, private investors, and national investment groups on buying, selling, and valuing apartment buildings, investments and development land across the Province of Ontario including Waterloo Region (Kitchener, Waterloo and Cambridge), Guelph, Brantford, Hamilton, London, Milton, Windsor, Kingston, Belleville, Brockville and Sudbury.

Clients know Terry for candid advice, data-driven analysis, and doing the work well ahead of the deal. He writes regularly on Ontario landlord rules, rent control, the Landlord and Tenant Board, and housing policy to help property owners make informed decisions.

Thinking about selling an apartment building, or looking for your next investment property? Call Terry at (519) 591-1725, email [email protected], or visit terryriddoch.ca for a confidential, no-obligation conversation about your property.

Sources

[1] ITSO InfoSparks (ShowingTime), Waterloo Region monthly residential data by property type, data as of November 4, 2026. Year-to-date and peak comparisons calculated from the monthly series. [Link to the ITSO export to be added]

[2] Desjardins Economic Studies, Bank of Canada decision of October 28, 2026, including the Bank's inflation projection and Governor Macklem's remarks: https://www.desjardins.com/en/savings-investment/economic-studies/canada-boc-october-28-2026.html

[3] Mortgage Professionals Canada (MPA), economist and broker reaction to the October 28 rate increase, including RBC, TD, CIBC and bond yield comments, October 28, 2026: https://mpamag.com/ca/mortgage-industry/industry-trends/canadas-rate-hike-deepens-broker-worry-over-a-struggling-housing-market/595348

[4] Canadian Mortgage Trends, Bank of Canada sets 2027 interest rate announcement dates: https://www.canadianmortgagetrends.com/2026/07/bank-of-canada-sets-2027-interest-rate-announcement-dates/

[5] ForexFundamentals, Bank of Canada economic calendar, next decision December 9, 2026: https://forexfundamentals.com/economic-calendar/boc/2026-10-28

[6] Canadian Real Estate Association (CREA), September 2026 national statistics and revised 2026 to 2027 forecast, October 16, 2026, as reported by The Canadian Press via BNN Bloomberg: https://www.bnnbloomberg.ca/business/real-estate/2026/10/16/crea-downgrades-home-sales-forecast-for-the-third-time-this-year/

[7] Statistics Canada Labour Force Survey, September 2026, unemployment by city, as reported by The Canadian Press, October 9, 2026: https://cfjctoday.com/?p=1128099

[8] Department of Finance Canada, Canada announces targeted countermeasures in response to US tariffs, August 2026: https://www.canada.ca/en/department-finance/news/2026/08/canada-announces-targeted-countermeasures-and-substantive-support-for-workers-and-businesses-in-response-to-us-tariffs.html

[9] Region of Waterloo, Year-End 2025 Population and Households Bulletin: https://www.regionofwaterloo.ca/media/tymbmluj/year-end-2025-population-and-households-bulletin.pdf

[10] CMHC, Housing starts, construction and completions data, September 2026: https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-construction-data-september-2026

[11] CMHC, Housing starts, June 2026: https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2026/housing-starts-june-2026

[12] Region of Waterloo, Progress updates on water capacity constraint, Mannheim Service Area: https://www.regionofwaterloo.ca/programs-and-services/water-and-wastewater/mannheim-service-area-water-capacity-information-hub/progress-updates-on-water-capacity-constraint/

[13] CTV News Kitchener, Waterloo region adds drinking water capacity three years ahead of schedule: https://www.ctvnews.ca/kitchener/article/waterloo-region-adds-drinking-water-capacity-three-years-ahead-of-schedule/

[14] Region of Waterloo, Water capacity constraint progress timeline: https://www.regionofwaterloo.ca/media/dikbpr3v/140508-water-capacity-constraint-progress-timeline_access.pdf

[15] City of Cambridge, Water supply allocation: https://www.cambridge.ca/business-building-development/building-planning/water-supply-allocation/

[16] Around the Region (Region of Waterloo), Progress update: Interim Risk Management Framework approved, June 9, 2026: https://aroundtheregion.ca/progress-update-interim-risk-management-framework-approved-plus-progress-on-greenbrook-repairs/