Fall Market Trends To Set New Peak Prices
The Kitchener-Waterloo residential real estate market has continued its steady climb in property value through this year and the month of August. Homeowners and real estate enthusiasts alike will remember by May of 2017, our real estate market was experiencing the strongest value surge on record. At peak price, the average detached home in Kitchener-Waterloo was selling for $594,047 and worth 35% more than the year before (KWAR). Following these dramatic increases, the provincial and federal government began tightening the market through regulations which included a foreign buyers tax in the greater golden horseshoe (which includes KW), raising interest rates and requiring stress tests for mortgages. As a result, the market began a three-month corrective slide halting in August 2017.
Since that time, the local market has begun a string of steady month over month average value increases. The sales statistics for August 2018 have placed our market just a breath below the peak prices of May 2017, and if the trend continues, Kitchener-Waterloo should be breaking new value records come the months of September and October. The average residential sales average for August 2018 was $493,358 up 11.5% compared to August of 2017 and just below the $496,664 of May 2017. The average detached home sold for $583,564 last month.
Condominiums the strongest sector:
Waterloo Regions real estate market is also beginning to reflect a trend found in the Greater Toronto Area, condominium value gains are outpacing detached homes. In fact, the average sale price of a condominium apartment in Kitchener-Waterloo last month was $335,827 which is actually 14.5% higher than the market peak in May 2017. This is the first sector of the residential market to achieve value benchmarks higher than our record-setting year.
What is making condominiums so popular? It’s difficult to address such a broad trend with certainty but there are a few factors that likely contribute. Firstly, the federal government reduced the purchasing power of the average consumer by placing stress tests on mortgages. These added regulations may put the detached market out of reach for some first-time buyers who are now looking to condos. Furthermore, many baby boomers are now finally downsizing and also moving into condos. Finally, there seems to be a trend with younger buyers preferring core, urban locations which also favour condo living, some are even choosing to raise small families in apartments.
There are many new condominium developments springing up along the LRT line in both Kitchener and Waterloo. These developments have investment potential especially early in the process when developers are likely to offer pre-construction incentives. Contact Benjamins Realty Inc. to learn about where the next best place may be to consider an investment or home. Or read more under our development reviews in the blog section.