One for the Record Books!

2016 marked a turning point for the Kitchener-Waterloo area.

We were typically seeing gains of about 4% per year (2010 was a rebound year).

AVERAGE RESIDENTIAL SALE PRICE PERCENTAGE INCREASE YEAR OVER YEAR

2016 showed an almost 11% jump taking the average sale price from $349,528 in 2015 to $387,404!

A record number of 6,655 homes were sold in 2016. The market saw very high demand for homes in this area which helped drive prices up. What drove demand in 2016?

1. Buyers from the GTA, Hamilton, Burlington, Milton, and other areas to the East where prices are out of reach.
2. Investors looking for a new investment hot spot with lower price entry points than the GTA.
3. Those relocating to take advantage of our job market in tech, insurance, education and infrastructure.
4. Continued low mortgage rates.
5. New mortgage rules that have made it harder to purchase properties at higher price points in markets to the East.
6. Confidence in the outlook for KW given investment in transit and infrastructure.
7. Confidence in the KW job market given our great tech community attracting huge players to the area and promoting small business development and entrepreneurship.
8. International investment – whether to locate their money in a safe country or to help house children while in university/college.

There is another reason that prices rose 11% – supply was down by 9.7%.  Fewer home owners listed their homes in 2016 vs 2015. Those thinking about selling had to consider where they would move – they would sell their home fast and for great money but that would then mean they would become a Buyer joining the fight to find a new home. I think this was overwhelming for many people and not even possible for those looking to downsize given that homes at the lower price points tend to rise faster than homes at the higher end. We also saw people staying put for the same reasons people are looking to move to the area. I also think the decrease in the number of homes listed shows confidence in the market – home owners are hanging onto their properties believing that the market is going to continue to rise. Why sell now when the market is up 11% when you can wait until 2017 or 2018 and see your home value possibly rise by 22% or 33%?

Here are the numbers for 2016:

Average price for a single detached home: $451,738 UP 12.5%

Average price for an apartment style condo: $229,676 UP 3.6%

Average price for townhouses: $287,396 UP 9.9%

Average price for a semi-detached: $300,806 UP 11.8%

Number of units sold in each category in 2016:

Single detached: 4203 UP 16.3%

Condominiums (all styles): 1511 UP 28.1%

Semi-detached: 430 UP 6.2%

Townhouses: 430 UP 7.2%

We’ve been watching real estate markets in Vancouver, Toronto and Ottawa aggressively rising each year.

I think it is our turn now. KW is a great place to live and has a lot to offer.

All of the same reasons that markets rose in 2016 are still present and I fully expect 2017 to be another record-breaking year!