The 2016 Kitchener-Waterloo-Cambridge real estate market was the roller coaster that just kept accelerating: demand thoroughly outweighed supply, bidding wars at every turn, home prices skyrocketed, record sales volume.
Will this ride come to an abrupt stop in 2017? Will it be warp speed ahead? Or, will we settle back into cruise control like in years past?
Let’s take a look at some of the predictions from around the Canadian real estate world and see how they apply to our local market:
Context: this would be record sales volume if not for 2016.
We already had a shortage of inventory here in Waterloo Region. Unless demand drops off significantly in 2017 (not likely, see points below), expect a very similar level of competition for homes in our region.
In other words, prepare for (bidding) war.
An 8% jump would put the average selling price in our region at $413,313, up from $382,697 in 2016.
But that’s peanuts compared to what’s happening 30 minutes east of us.
If these forecasts are correct – and those making predictions tend to be conservative – the average home price in Hamilton-Burlington could hit $600,000 this year.
Yes, 600k is still less than the GTA home price average – but at what point will Toronto buyers stop seeing Hamilton-Burlington as enough of a bargain and set their sights squarely on K-W?
At what point do local Hamilton-Burlington buyers start looking for cheaper, out of town options?
This leads me to the next round of predictions:
This is why I don’t see demand dropping off in our area anytime soon:
– GTA prices are forecasted to rise another 8% (remember, that’s 8% on top of an average price of $725,857!)
– As stated, Hamilton-Burlington home price averages may hit 600k in 2017.
– Mortgage rates have risen modestly, but enough to reduce purchasing power
– Tougher mortgage qualification requirements have further reduced purchasing power for many buyers, particularly first-time buyers
And then there’s K-W, with its improving transit infrastructure, top schools and a burgeoning tech sector, offering an average home price south of 400k.
We’ve already seen GTA buyers flock our way – bank on that continuing. We could also see more migration from the Golden Horseshoe as their home values continue to hit new heights. We’re a prime target for those in Canada’s most populated markets who can’t find affordable housing.
As an offshoot, I think we’ll start to see more local buyers in K-W-C expanding their search radius to neighbouring cities such as New Hamburg, Ayr, Wellesley, Elmira, Brantford – even Woodstock, where the average home price is still under 300k (as of Oct 2016). Just as Toronto buyers are willing to endure more of a commute to get in the housing market, buyers in our region may elect to do the same to get more for their money .
Any way you slice it, it’s shaping up to be an active and, yes, competitive 2017 in the Kitchener-Waterloo-Cambridge real estate market.
“Boom” may indeed become the new “normal”.