By Condo Culture
Legendary investor Warren Buffett famously said that it is wise for investors to be “fearful when others are greedy, and greedy when others are fearful.” This timeless quote can be applied to today’s real estate market where after the frenzy of recent activity, we are witnessing emotionally charged buyers and investors park their money on the sidelines as key interest rates and inflation rise and we see negative headline after headline from the press.
The current volatility presents an opportunity to buy before prices climb again. With population growth in the region outpacing the supply of new homes, we expect there to be continued upward pressure on the pricing of the homes over the longer term. Interest rates are still quite low historically, and there are strong buying opportunities out there RIGHT NOW with fewer active buyers leading to less competition and lower prices. This is an ideal time for buyers and investors to be bold and fearless, and secure good value properties since the long-term prospects for price growth are exceptional in the Waterloo Region. Contact our team to start touring condos and find the perfect one to buy or invest in.
We already have a housing shortage in the Waterloo Region with annual demand consistently outpacing supply, and the picture looks similar for the foreseeable future. Over the past five years from 2016 to 2021 - Kitchener’s population grew by 10.15%, Waterloo’s was very strong at 15.67%, Guelph’s was 9.06%, Cambridge’s came in at 6.59%, and interestingly enough, Toronto’s was just 2.3%, and Mississauga’s actually dropped by half a percent. Waterloo outpaced Canada’s largest city by almost 7x, Kitchener by more than 4x, Guelph by almost 4x, and Cambridge by almost 3x.
According to the recent Census report from Statistics Canada; From 2016 to 2021 > Waterloo Region was one of the fastest-growing regions in Canada at 9.9%. In that same period, the growth rates of homes (9%) didn't meet the growth rate of the population. The issue was most prevalent in Kitchener and Waterloo.
The Waterloo Region’s developers have been doing a remarkable job of bringing superb new projects to market, but still can’t keep up with the region's current and forecasted population growth. This means that pricing can only go one way, and that’s up.
Despite the short-term macroeconomic pressures we are now experiencing, the fundamental issue of supply and demand in the region should continue to apply upward pressure on prices in the years to come. Everything points toward strong growth prospects for buyers and investors in the Waterloo Region, and the time to act is now before a surge of people gets back into the market and prices rise again.
The Waterloo Region gets large influxes of new residents every year, and is expected to grow to 923,000 people by 2051 - that translates to 330,000+ net new people settling into the region over the next 29 years! The average house in the region costs approximately $411K more than the average condo, making condos ideal for first-time home buyers & investors from an affordability perspective. Plus, rental rates continue to climb monthly in the region due to increasing demand and low supply, attracting investors from multiple markets and improving cash flow on investment properties. With prices well below the GTA, our rents are still 80% of what you would expect in the downtown Toronto Core.
We have been keeping a watchful eye on the market as real estate prices have been falling across all product types, but the least impacted one is condos. Why is that? Home affordability has been stretched to the limits over the last couple of years with supply getting squeezed and unprecedented demand elevating fast. With the gap between single detached and condo pricing continuing to widen, more buyers are looking at condos as a way to enter the market and build equity.
The cities of KW, Cambridge, and Guelph are now building up more than out, and new condo units are fueling a healthy portion of all new homes being built - providing more new options for purchasers and attractive downtown core living options. Condos are the most affordable home type, and this inevitable trend will continue going forward. Jump on the opportunity now and watch as your purchase or investment steadily increases in the years ahead!
We are the condo experts in the Waterloo Region and help sellers, buyers, and investors succeed on all types of deals from resale to pre-construction to assignments. When you think about anything condo-related in our wonderful region, Condo Culture should immediately come to mind. Connect with us to learn more about how we position our clients for success and make the journey seamless from start to finish and beyond.