Kitchener-Waterloo real estate prices have been on a steady incline in recent years, so it’s little surprise that the city’s housing market ranked #11 of 16 Canadian cities when it comes to housing affordability, according to the 2020 RE/MAX Housing Affordability Report. However, cost-conscious home hunters in search of a good deal can still find one in the communities of Country Hills, Lakeshore and Westvale, which have been named the most affordable neighbourhoods to buy a home in Kitchener-Waterloo.
Factors contributing to Kitchener-Waterloo real estate prices
Kitchener-Waterloo real estate prices have been on the rise, experiencing an eight-per-cent increase from 2018 to 2019, and another seven-per-cent increase expected in this year (source: 2020 Housing Market Outlook Report). This is a contributing factor in the region’s ranking as one of Canada’s less-affordable housing markets, according to the new RE/MAX Housing Affordability Report.
In its inaugural Housing Affordability Report, RE/MAX examined 16 of Canada’s most-populous regions and ranked them on an affordability scale, with #1 being the most affordable and #16 being the least affordable. RE/MAX brokers were surveyed about average home sale prices and whether they believe real estate in their region is overvalued, undervalued, or right on the money. Kitchener-Waterloo real estate came in at #11 of 16 cities. Canada’s most affordable city to buy a home is Regina (#1) and the least affordable place to buy a home is Vancouver (#16).
RE/MAX’s affordability ranking was determined by assessing the percentage of a buyer’s monthly income needed to carry a mortgage, assuming a down payment of 25 per cent, and based on the forecasted 2020 average sale price per region and the forecasted 2019 average household income.
Kitchener Waterloo real estate is currently classified as undervalued, with an average sale price of $527,718. The region is attracting high-valued employers in the tech sector. This, coupled with two world-renowned universities, is credited with Kitchener-Waterloo’s continued growth, in lockstep with the job market and wages. However, due to the booming job market and an influx of immigrants coming to the region, Kitchener-Waterloo is experiencing a housing supply shortage. This has put major pressure on local government and builders to try and keep up with demand.
First-time homebuyers in Kitchener-Waterloo commonly seek out apartment-style condominiums, which have a typical entry-price range of $350,000 to $500,000.
At the high end of the affordability spectrum, the region’s least affordable neighbourhoods include Westmount, Old Beechwood and Laurel Wood.
Despite the commonly held notion that housing in Canada is unaffordable, the report finds that the vast majority of Canada’s largest urban centres (75 per cent) are currently undervalued, according to a survey of RE/MAX brokers in 16 of Canada’s most-populous cities.
In its report, RE/MAX explored the most popular property types sought by first-time homebuyers, the least and most affordable neighbourhoods in each of the 16 housing markets, factors preventing buyers from entering the market, and methods homebuyers are using to enhance the affordability of homes. Current and prospective Canadian homeowners were also surveyed about their sentiments around home ownership, barriers to owning a home, financial factors impacting home ownership, and what could potentially improve housing affordability.