Kitchener Waterloo housing market to favour sellers in 2021, prices expected to rise 7%
Friday Dec 04th, 2020Share
The Kitchener Waterloo housing market is expected to remain in seller’s market territory in 2021, characterized by a continued lack of housing supply that impacted the market in 2020. Low inventory has been a common trend across many Ontario housing markets, putting prices on an upward trajectory. Indeed, the average price in the Kitchener-Waterloo housing market increased to $630,820 in 2020 (Jan. 1 – Oct. 31), up from $530,376 in 2019 (Jan. 1 – Dec. 31). With similar conditions expected to continue next year, the RE/MAX outlook for Kitchener Waterloo residential real estate in 2021 is an increase in average price of 7%, to approximately $674,977 across all property types.
Who’s driving the Kitchener Waterloo housing market?
Kitchener Waterloo’s current seller’s market should persist in 2021. Given the continued increase in average home prices over the course of 2020, it is expected that fewer buyers in 2021 will be able to afford and purchase at the same rate they did in 2020. The region experienced an influx of buyers coming from large cities such as Toronto, many of whom are looking for more outdoor space and backyards.
This has been a common trend across many Canadian housing markets as well as regions abroad, as homebuyers seek more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.
Most first-time homebuyers in Kitchener Waterloo are young couples in search of condominiums. Next year, the dramatic decrease in inventory, and increase in demand and home prices may cause some difficulty for first-time homebuyers looking to get into the market. Similarly, move-up buyers are also facing higher prices and limited supply, which will make purchasing a new home difficult in 2021.
The demand for luxury properties continues to grow, along with the demand for the new construction market.
The top neighbourhoods in 2020 and prospectively in 2021 in Kitchener Waterloo are Pioneer Park/Doon, Laurentian Hills/Country Hills West, and Uptown Waterloo.