It’s a historic benchmark – today, for the first time ever, the average sale price of a detached home in Kitchener-Waterloo is more than one million dollars. The sheer pace of the price increase that our real estate market has seen since the summer of 2020 has been nothing short of breathtaking for both average residents and industry insiders alike. While the Waterloo-Wellington-Perth region of Southwestern Ontario has been trending in the right direction for some time in terms of the desirability of its real estate, I don’t think anyone could have quite predicted the outcome of the forces swung into effect by the pandemic.
Initial fears of widespread job loss and devastating unemployment numbers understandably had many observers predicting dire consequences for the housing market – after all, if people couldn’t keep up with mortgages, would we soon be seeing a collapse in values akin to the 2008 global financial crisis? When it quickly became clear that our area was relatively well insulated from the worst financial effects of the pandemic, with its highly educated workforce and the capacity of most residents to work from home when necessary, home values took off in the opposite direction. Historic price increases followed month by month, as legions of newly minted WFH’ers looked to either upgrade their digs now that they were spending so much more time at home, or to dispose of small, expensive properties in the GTA, and acquire more space a little further away from the big city now that proximity to the office wasn’t as large of a concern.
Demand for housing in the Kitchener-Waterloo-Guelph-Stratford area in particular has exploded over the past 18-24 months, as the supply of new and resale homes and condos has not been up to the task of keeping pace with the volume of aspiring new residents. This trend, while at times slowing, has not shown any signs of being reversed in the foreseeable future. With a new round of lockdowns coming into effect to usher in 2022, demand for larger homes with space for home offices, home-schooling, and growing families continues unabated, and new housing starts have no hope of turning out enough developments to match the urgent need from buyers. For these reasons, I don’t expect the million-dollar mark to be a passing curiosity.
With that, let’s have a look at some of the more salient statistics from the Kitchener-Waterloo real estate market as we enter the new year. From the KWAR:
“In December, the average sale price for all residential properties in the Kitchener-Waterloo area was $842,014. This represents a 32.5 per cent increase over December 2020 and a 2.5 per cent increase compared to November 2021.
The average price of a detached home was $1,021,353. This represents a 34.7 per cent increase from December 2020 and an increase of 3.4 per cent compared to November 2021.
The average sale price for an apartment-style condominium was $500,352. This represents an increase of 30.6 per cent from December 2020 and an increase of 1.0 per cent compared to November 2021.
The average sale price for a townhouse was $717,475. This represents a 39.4 per cent increase from December 2020 and an increase of 2.1 per cent compared to November 2021.
The average sale price for a semi was $770,246. This represents an increase of 33.5 per cent compared to December 2020 and an increase 7.3 per cent compared to November 2021.”
In terms of the past year in review, a total of 7,581 residential properties changed hands via MLS over the course of 2021 in Kitchener Waterloo. This stands in comparison to 6,492 in 2020 – a substantial year over year increase. Meanwhile, the average length of time it took for a home to sell in 2021 was just 10 days – that’s down six days from the previous year (you can see how quickly our market is moving!)
The average selling price of a residential property, regardless of type, was $770,596 in 2021 – that’s an increase of 25.8% over the average sale price in 2020, which was just $612,521. Total sales in Kitchener-Waterloo in 2021 included 4,272 detached homes at an average price of $920,726; 578 semi-detached homes at an average of $673,543; and 1,127 condo units at an average sale price of $448,208. The total value of all residential real estate sold in Kitchener-Waterloo in 2021 was an eye-watering $5.84B – that’s billion with a capital ‘B’! For comparison’s sake, that same number in 2020 was ‘just’ $3.9B, and $3.1B in 2019.
Folks, these are not numbers indicative of a housing market in any danger of decline. If you sat on the fence in 2021 hoping that prices would come down somewhat before you entered the market, I sympathize. But you really and truly cannot afford to put a purchase off any longer if you hope to find a home here in KW (or within 30 minutes, for that matter) – you’ll already have seen how much inaction will have cost you last year, and this isn’t about to change.
