Is there any region in the Ontario real estate market that is experiencing weakness? It would be hard to find a city or a regional municipality whose housing sector is on hard times right now. Despite a significant economic downturn and a global public health crisis, the province’s real estate market is doing rather well. In fact, many places are enjoying all-time highs, whether it is sales activity, prices or both. For once, it is not just Toronto that’s witnessing record-breaking numbers – it is province-wide.
You can add Kitchener-Waterloo to the list of red-hot real estate markets in Ontario, thanks to migrating buyers from the Greater Toronto Area, historically low interest rates, and changing consumer behaviours.
That being said, its not the first time that the Kitchener-Waterloo market has soaked up the spotlight of Canadian real estate news headlines. It has always been an attractive location to plant roots thanks to its thriving tech industries and think-tanks, top universities, and a wide selection of spacious living options for prospective homebuyers. With a foundation of strong demand, the Kitchener-Waterloo housing market has continued to soar throughout the pandemic, and shows no signs of slowing as we kick off 2021.
Ontario Real Estate: Prices Soaring in the Kitchener-Waterloo Housing Market
If you are a homeowner in Kitchener-Waterloo, you are residing in a seller’s market. If you are a homebuyer, be prepared to go to battle for some of the most desirable properties in Central Ontario.
According to the Kitchener-Waterloo Association of REALTORS® (KWAR), it was another record-breaking month for home sales in December. The data highlighted that home sales surged 42 per cent from the same time a year ago, which represents the sixth consecutive month of record home sales.
Property types posting noteworthy annualized growth in December are:
- Detached Homes: +46.7 per cent
- Condominium Apartments: +34 per cent
Meanwhile, the average sale prices of all residential properties sold in December advanced 14.4 per cent year-over-year to $634,545. The median price of all residential properties soared 17.3 per cent to $575,000.
These prices could be a bargain moving forward since the competition for homes is fierce, with housing inventory sitting at just one month or less throughout most of 2020. For context, the number of months inventory in Kitchener-Waterloo between 2011 and 2015 was four months, while between 2016 and 2020 it was 1.5 months.
Ultimately, says Nicole Pohl, the President of KWAR, much of this demand for Kitchener-Waterloo real estate is being driven by move-over buyers from the Greater Toronto Area.
“Even well before the pandemic we had noted a trend of consumers migrating out of the GTA to our region,” says Pohl. “As the pandemic heated up it only fueled this fire more as the very concept of what home means was shifting. With more people working from home, some permanently, space has become a greater concern than ever before. When you combine this with all the other great attributes of our region, it is no surprise this occurred,” said Pohl in a news release.
Could this intensity persist through 2021?
The Kitchener-Waterloo Market in 2021
It is hard to dispute the idea that the COVID-19 pandemic has reshaped our lives and redefined the concept of work. Our homes have morphed into workspaces as more professionals continue to work from home. If it has yet to become your second office, your home has transformed into an entertainment hub, a do-it-yourself gym, or a restaurant. Put simply, we are spending more time in our homes than ever before.
If this is an accurate representation of what is transpiring at the moment, it explains why people are leaving the GTA and looking to the Kitchener-Waterloo region for homes with a little more living space to accommodate all this additional activity! No longer are households confined to hyper-dense urban centres to be close to work. Now they can advance their careers remotely, saving a lot of money in the process.
Although prices have skyrocketed in Kitchener-Waterloo, they are still a bargain if you sold your home in the Toronto area. As Pohl told Waterloo Region Record: “They’re looking at this massive value for the price. Throwing another $10,000 (or) $20,000 into the pot isn’t such a big decision.”
The Bank of Canada (BoC) slashing interest rates to all-time lows has also given homebuyers more options. Since they can borrow more at a cheaper cost, many families can expand their parameters when searching for their dream home. In Kitchener-Waterloo, you receive more for less, at least in terms of square-feet – not to mention the scenery! With interest rates expected to remain low for another couple of years, the broader Canadian real estate market is going to benefit.
In the end, 2021 could turn out to be another big year for Kitchener-Waterloo and so many other more suburban jurisdictions within Ontario, and across Canada.
Goodbye City, Hello Small Town Canada?
While we’re hesitant to label the current real estate trends an “exodus,” since Canada’s major urban centres continue to be home to millions of people, “relocation” may be a more accurate way to describe the wave of urban homeowners transitioning to a new life in a small town. Is this a temporary trend or a permanent phenomenon? While we may have to wait it out to see and understand post-pandemic home-buying preferences, the Kitchener-Waterloo market is primed to remain strong no matter what unfolds in the years ahead.