As construction of the light rail transit system (LRT) continues, Kitchener-Waterloo is expected to continue to thrive economically. In combination with the continued increase of Go-Train frequency between Kitchener and the GTA, along with the healthy tech sector growth, the region will continue to attract buyers looking to find more value for their money arriving from Toronto and area, as well as commuters, and those employed or looking to become involved in K-W’s technology parks and increased business growth.
The RE/MAX 2017 average residential sale price expectation for Kitchener-Waterloo is an eight per cent increase in home prices, increasing to $413,313 for the average residential sales price, up from $382, 687 in 2016. Spring 2017 should also bring increased inventory levels, along with some new developments coming to market. However, 2017 is expected to stay a seller’s market with an expected 8 per cent increase in home prices.
For sellers, these numbers provide even more incentive to ensure you present your home in the best light, to make the most out of the sale of one of your biggest assets. This includes making repairs, maintaining home systems including HVAC, and water lines, as well as keeping your curb appeal in tip-top shape.
If you’re thinking about selling your home and want to maximize your profits, ask us how! We’ll provide you with a free home evaluation and get you started on understanding the value of your home in our current market.
The Kitchener-Waterloo Housing Market saw significant growth in 2016. The average residential sale price rose approximately 10 per cent to $382,697 up from $348,220 in 2015. Many residential listings received multiple offers, with pre-emptive or bully offers being a common occurrence.
Attracting Out-of-Towners – Greater Toronto Area buyers continue to drive demand in Kitchener-Waterloo as they seek out affordable housing options along the GO Train line. Waterloo’s economy and consumer confidence were boosted in 2016 due to substantial growth in its tech sector as the low Canadian dollar encouraged increased investment from American tech companies.
Outlying Towns Heating Up- New Hamburg and Baden, located on the outskirts of Kitchener, are becoming increasingly popular with move-up buyers and retirees. For young families, the areas offer good schools and nice properties at affordable prices, while retirees are attracted to the adult retirement villages, which feature bungalow-style homes, amenities and activities.
First-Time Buyers- First-time buyers are a key driver of the Kitchener-Waterloo market. Young couples looking to enter the market typically prefer low maintenance condo properties that provide easy access to the downtown core.
Condo market – Condo sales were up in 2016 between January and October to 1,358, compared to 1,029 properties sold during the same period in 2015. Due to a surplus of condo inventory near Wilfred Laurier University and the University of Waterloo, it’s expected that some of the housing initially intended for student rentals may eventually shift to wider availability residential rental units.
Source: REMAX 2017 HousingMarketOutlookReport
With the new mortgage rules and home prices rising faster than ever in Kitchener-Waterloo and beyond, first-time home buyers are feeling the pinch. With the risk of being priced out of the market, there is the additional challenge of not only carrying a larger mortgage but also coming up with the minimum 5% deposit, or ideally 20% deposit that would exclude the need for CMHC mortgage insurance fees in most cases.
But recent studies show that rising prices won’t stop buyers who are determined to start building equity as soon as they are able. In fact, half of Canadians aged 18 to 34 own homes and rent out a room or basement to help cover housing costs.
While it may be an inconvenient to share your home, getting closer to being mortgage free, and having the extra income generation may be worth the temporary sacrifice. According to a study based on 2000 participants, 12 per cent of Canadian homeowners currently rent or plan to rent out part of their home, with that amount rising to 20 per cent for 18- to 34-year-old homeowners.
November set another all-time high in market sales, with one month still to go in 2016. “Year-to-Date Sales to the end of November have now exceeded any previous end-of-year totals on record,” says James Craig, president of the KWAR. But greater sales numbers were not due to greater inventory. With a substantial shortage of homes, many properties are selling above list price, as more buyers compete for fewer homes. According to the report:
As of the end of November, the KWAR’ MLS® System only had 565 active residential listings on the market, down 23.1 percent compared to the previous month, and 60.8 percent below the same period last year.
The average price of all residential properties sold in November was $411,602 a 15.5 percent increase over 2015. Detached homes sold for an average price of $473,104, an increase of 13.9 percent compared to November 2015. During this same period, the average sale price for an apartment style condominium was $209,360, a decrease of 8 percent. Townhomes and semis sold for an average of $310,151 (up 14.8 percent) and $330,534 (up 27.7 percent) respectively.
“With a notable shortage of inventory, many properties are selling above list price,” said Craig. “This is because you have many buyers competing for fewer properties, and this is pushing up the average price.”
For more details on November’s K-W Market Update that includes statistics from Wellesley, Wilmot and Woolwich Townships, click here.
Kitchener-Waterloo was characterized by strong real estate market throughout 2016 with house prices increasing by an average of 10% over home prices in 2015. A series of broken sales records combined with low inventory has had a rippling effect on everyone.
Move-up buyers in particular have enjoyed the maximization of their equity. Owners who have sold their homes in 2016 are benefiting from the substantial activity at the lower end of the market, which has allowed them to move into larger, new homes, often in the luxury $1 million+ range. While there has been some multiple-offer activity in the luxury home market, competition is remarkably less than that found below $500,000.
However, there are only a few weeks left in 2016 for buyers of luxury homes to enjoy the original land transfer rates. New mortgage policy has updated or “modernized” land transfer rates to reflect the prices of luxury homes, with purchases of homes over $2 million seeing a .5% rate increase to help accommodate the doubling of the First-Time Home Buyer land transfer rebate announced in November 2016.
“Modernized” Ontario Land Transfer Tax Rates
Home Purchase Price Tax Rate
Up to $55,000 0.5%
$55,000 to $250,000 1.0%
$250,000 to $400,000 1.5%
$400,000 to $2-million 2.0%
$2-million and over 2.5%