Sales in the Kitchener-Waterloo housing market experienced a 60% decline in real estate activity at the peak of the pandemic, but according to the RE/MAX Fall Market Outlook Report, average home prices managed to remain steady. With many sellers holding off on listing their homes during the spring, the current market is seeing an increased amount of activity due to pent-up demand, with multiple offers on homes, sometimes in the double digits, not uncommon.
Looking ahead, market optimism will be very closely tied with the number of available jobs in the region; should employers in Kitchener-Waterloo begin to relocate to the United States, depending on the strength of the Canadian dollar and the number of American companies currently operating in the region, average home prices could potentially fall. However, the Kitchener-Waterloo housing market is currently in strong seller’s territory across the board (residential, recreational and luxury property segments), with many buyers looking to purchase larger recreational properties with more space given the cancellation of travel plans and a growing desire to move away from densely populated areas.
Based on these factors, the Kitchener-Waterloohousing market is expected to see a 3% increase in average residential prices for the remainder of the year.
Ontario Real Estate Trends
What’s been happening across other Ontario real estate markets? With the province being one of the hardest-hit regions in Canada, markets such as Niagara, Mississauga and Kitchener-Waterloo experienced significant drops in activity. However, come June, they bounced back aggressively as economies began to reopen. With all of Ontario now in phase three of re-opening and consumers more comfortable engaging in the market, market activity in Ontario is expected to remain steady in the fall, with modest price increases of up to 6% in some regions.
Leading indicators from RE/MAX brokers and agents across Canada’s housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6% during the remainder of the year. This is compared to the 3.7% increase that was predicted in late 2019.
The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32% of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.
Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44% of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.
Canadians equally split on their confidence in the housing market
Canadians are almost equally split in their confidence in Canada’s real estate market, with 39% as confident as they were prior to the pandemic, and 37% slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56% of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell.
“The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”
Additional highlights from the 2020 RE/MAX Fall Market Outlook Report Survey:
48% of Canadians would like to live closer to green spaces
48% of Canadians say it’s more important than ever to live in a community close to hospitals and clinics
33% of Canadians would like more square footage in their home and have realized they need more space
44% of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)
About the 2020 RE/MAX Fall Market Outlook Report
The 2020 RE/MAX Fall Market Outlook Report includes data and insights supplied by RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments.
Seller’s market expected for 2020, prices to increase 7%
The Kitchener Waterloo housing market will continue to favour sellers in 2020, with residential prices expected to increase by seven per cent.
Kitchener-Waterloo sat in seller’s market territory in 2019, and the trend will likely continue into 2020 due to low inventory and multiple-offer scenarios in the region. Housing affordability has been a major concern over the past year. The construction of affordable housing has not been able to keep up with the demand. Immigration, lack of supply and the aftereffects of the stress test are all expected to continue putting pressure on the housing market and impacting activity in 2020.
First-time homebuyers and foreign buyers drove demand in 2019, with the most in-demand neighbourhoods including Doon, Laurentian Hills and Huron Park.
Continued population growth and strong employment numbers are expected to boost the Kitchener-Waterloo housing market in 2020.
From a national perspective, RE/MAX anticipates a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected, with an estimated 3.7-per-cent increase in the average national residential sales price, according to the RE/MAX 2020 Housing Market Outlook Report.
Most individual markets surveyed across Canada experienced moderate price increases year-over-year from 2018 to 2019. However, some regions in Ontario continue to experience higher-than-normal gains, including London (+10.7 per cent), Windsor (+11 per cent), Ottawa (+11.7 per cent) and Niagara (+12.9 per cent).
“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”
Lydia McNutt is an award-winning journalist and editor, with almost two decades of experience in the real estate sector. At RE/MAX, Lydia is responsible for developing consumer-facing content while promoting the RE/MAX brand. This includes housing market reports and RE/MAX network news featured on the RE/MAX Canada blog and social media channels. Lydia has been published nationally on topics ranging from real estate, architecture, decor and design, to finance, business, technology, entertainment and lifestyle. When she’s not head-down at her writing desk, Lydia is busy “momming” in Oakville, Ontario, where she lives with her husband, two kids and their chocolate lab, Betty. Email Lydia at firstname.lastname@example.org