We took a look at which areas and which property types appreciated the most!

If you’re reading this, you’ll probably share our love for real estate and agree that it can be one of the safest and most rewarding places to invest your money over the long term. Real estate values have risen consistently and significantly over the past number of decades both here in Waterloo Region and across Canada as a whole.

By how much?? We’re glad you asked!

We took a look across Canada using the Canadian Real Estate Associations Home Price Index values recorded over the last 18 years to see exactly how much real estate values have increased on average, by area and even by type of home (ie. single detached homes, townhomes, condo/apartments, etc.) and then compared it back to what has happened here locally. Here are the results!

Based on the data

Values across Canada as a whole increased by $519,600 across all home types. Apartment style condos increased by $377,600 and townhomes (including both condominiums and their freehold counterparts) have increased by $493,100. So to put this into perspective, let’s be conservative and assume you needed 20% back then to get a mortgage just to help draw a closer comparison to current day. Under this scenario, you could have bought a typical apartment style condo for approximately $175,000 and today it would be worth up to $375,000 more. So that $35,000 you put down as a downpayment in 2005 could have turned into as much as $410,000 including your original investment and not even counting any additional principal paid down on your mortgage. Not bad eh?!

Did it matter if I bought a house, townhouse or condo apartment? Did one perform better than the others?

Yes and no. All increased significantly and truth be told you couldn’t have gone wrong with any of them looking back now. There were however some noticeable differences in the amount of growth by property type. On a year over year basis the increases only varied by around 1-1.5% but over the course of an 18 year span this added up. Condo and freehold townhomes came out on top with a total of 247% growth over the period. A great start if you were buying your first home and an incredible investment if you were buying a condo or freehold townhouse to rent out.

But all and all, it’s not so much what type of property you ended up buying. Hindsight is 20/20 but looking back on it now through the lens of the data, what mattered the most is you acted on an opportunity vs. deciding not to buy anything at all and that’s a lesson that continues to be relevant today. We all want to find the best deal out there and trust us when we say no one loves the chase more than us. It’s always important to do your research and have an expert like us on your side to ensure you’re going in educated on the property and all aspects of the market. But at the same time, it’s important to remember that while you want to ensure you’re making the best decision possible, history tells us that the more important thing to do when you find the right opportunity is to act on it and the desire to make the right decision doesn’t turn into paralysis by analysis and doing nothing at all like it so often can. There are countless properties that even we look back on personally today that we wish we would have purchased whether it be one year ago or ten. It never feels good to miss out on an opportunity that turned out to be great but at the same time. they’re great reminders for the future when the right opportunity comes up.

Which provinces posted the strongest price increases?

As you could probably expect, price growth varied widely province to province over the past 18 years. While housing prices in all provinces increased overall, their % growth rates varied significantly. Ontario came out with the highest % growth of all provinces with a 250% increase, followed by British Columbia with a 243% increase and Prince Edward Island with a 214% increase. Within Ontario, condo apartments and condo and freehold townhomes and condo apartments came out on top as the property types with the highest % price increases over the period with average annual growth rates of 15.86% and 14.38%, respectively.

Thought the growth rates in Ontario were surprising? Wait until you see these!

Within Ontario, it may come as no surprise that a similar trend played out as it did across the provinces. All cities experienced increased prices overall but sometimes at a much different rate of growth than their neighbours. Kitchener-Waterloo, London, Hamilton-Burlington and Barrie had the highest growth rates of all of the cities surveyed across Ontario, each reaching between 292-309% growth through the period. Interestingly, these 4 cities even outpaced the price growth seen in larger areas like the GTA and the Greater Vancouver area!

Condo and freehold townhomes and apartment style condos in Kitchener-Waterloo experienced some of the highest growth rates of any cities or property types across the country with astounding 335% and 318% growth through the period, resulting in an average of 18-19% annually! So what’s next? While past performance isn’t always indicative of what will happen in the future, when comparing and considering which real estate markets hold the most potential for investment, areas which have shown a strong trend of recent growth with the fundamentals to suggest this growth should continue in the near future are a great spot to start. And the good news is, some of the strongest recent performers are right in your backyard! Have questions on the market or real estate investing in general? Our team of experts are here to help!

Have a great weekend everyone!

-CC

Data Source: Canadian Real Estate Association, MLS® Home Price Index (HPI) Data by Province, City and Property Type, January 2005-July 2023.