While we haven’t seen official stats on this, our team has noticed a significant uptick in the number of GTA-based offers on our listings so far in 2016.
Will this continue? What’s the impact on buyers and sellers in Waterloo Region? Let’s start with the first question.
Will GTA buyers continue to influence our real estate market? All signs point to YES – here’s why:
Relative Value. The average home price in Toronto, as of July 2016, is around 710k – up 16.5% from July 2015. Incomes have not increased at the same pace, causing GTA buyers to flock westward for affordable options. Kitchener-Waterloo, with its average home price of 387k, provides a much more affordable option while still being within a reasonably commutable distance.
Not Just a “Bedroom Community”. It’s not just GTA commuters we need to consider. With Waterloo Region boasting an internationally-renown tech community (Google, Communitech, etc.), strength in manufacturing, great universities and colleges, many are making the move to live AND work here.
Infrastructure Investment. When you look at the infrastructure investments currently taking place – Light Rail Transit throughout the region, added GO service to Toronto, expansion of the 401 between Cambridge and Kitchener from 6 to 10 lanes – Kitchener-Waterloo-Cambridge becomes that much more convenient a place to relocate.
So what does this mean for local buyers and sellers?
Until we build enough new homes to accommodate this influx, we can expect demand to continue to outweigh supply, creating more competition and higher purchase prices.
While significant price increases would typically cause a cooling effect (because buyers simply cannot afford to buy anymore), the “relative value” concept above should continue to be in play. As long as Waterloo Region homes are significantly cheaper than GTA homes, expect there to be a GTA buyer willing to pay top dollar for a “bargain”.
Looking to buy? Go into the home buying process expecting competition – especially if you’re looking at homes with easy access to the 401, which are especially attractive to GTA commuters. As well, your agent should try and find out who you’re up against; if you’re up against a GTA buyer, remember that they’ve already saved a TON of money by relocating and may not hesitate to tack on an extra 10-20k to seal the deal in a multiple-bid scenario. Trust your agent to provide as much context as possible so you can make a winning offer based on what’s happening right now, not what would’ve happened in 2015.
Thinking of selling? You have an opportunity to do very well and sell for much more than you would have in 2015. But remember: the same fundamentals apply when selling your home: presentation/staging, marketing, negotiations. As we wrote in a previous post, it’s not about selling your home – it’s about maximizing your return.
The more interest and offers you have, the more you’ll likely net at closing.
Buying or selling, your best course is to work with a full-time agent with their finger on the pulse of our local market and with a battle-tested marketing and negotiations strategy.
Thinking of buying or selling? Contact us today!