Kitchener Waterloo Mortgage and Housing Report Winter 2016
As of Winter 2016, the Kitchener Waterloo housing market continues with a strong momentum. This information is brought to you by Altrua Mortgage Brokers Kitchener Waterloo, the CMHC and the Kitchener Waterloo Real Estate Board.
Specifically, sales in the first 9 months of 2016 were up 17% over the year before, and looking into 2017 this momentum will continue. Average home values in Kitchener Waterloo were up almost 10% in 2016 to $438,708 due to several key factors:
Low Inventories. The main reason for above average pace of housing growth is the lack of new houses for sale, both on a new construction and resale side. Existing homeowners do not want to sell due to a perceived lack of equity in existing homes, and comparative pricing of larger upgrade homes. Moreover, 80% of area baby boomer homeowners have indicated that they are not willing to sell and prefer to remain in their larger upgrade home. New housing starts are not able to keep up with demand, with line-ups running out of sales offices when any new housing construction project in the $300,00 to $500,000 range is offered in the area. Lack of inventory has resulted in ‘crazy bidding wars’ according to local Realtors.
Employment growth in Kitchener Waterloo remains strong. The Kitchener Waterloo population continues to experience healthy growth as the technology, financial and advanced manufacturing sectors continue to grow at rates outpacing average Ontario and Canadian growth rates. This growth is expected to remain steady given long term area plans, and substantial new local developments. This along with a healthy stream of new Canadians is bringing many new first time home buyers to the area. Sales have been the strongest in the $250,000 to $349,000 range according the CMHC, and represent a mixture of housing types.
Toronto/ GTA buyers continue to migrate into Kitchener Waterloo. Word continues to catch on in the Toronto area that Kitchener Waterloo represents an excellent value. While the area is attracting major corporate presences such as Google and others, the housing prices are a fraction of what one would pay in the Toronto area. CMHC confirms this as reports that Toronto buyers will increasingly play a role in driving up local KW pricing.
Kitchener Mortgage Brokers and Waterloo Mortgage Brokers will continue to offer low mortgage rates in the sub 3% range for 5 year fixed products. Low mortgage rates will continue to play a role in driving demand for housing, as relative affordability is good. According to the CMHC, mortgage pricing should remain low throughout 2017, perhaps breaking through the 3% mark depending on what transpires with American politics.
The effects of new mortgage rules will push buyers out of Toronto and into the Kitchener Waterloo area. This is mainly fueled by those who are able to work from home and rental property investors who see excellent long-term potential in the area.
For more on the local Kitchener Waterloo mortgage and housing, and how you can benefit from it, connect with Altrua Mortgage Brokers Kitchener and Mortgage Brokers Waterloo.