Kitchener Waterloo (& Guelph) Housing Market Outlook (2021)
Kitchener Waterloo housing market to favour sellers in 2021, prices expected to rise 7%
The Kitchener Waterloo housing market is expected to remain in seller’s market territory in 2021, characterized by a continued lack of housing supply that impacted the market in 2020. Low inventory has been a common trend across many Ontario housing markets, putting prices on an upward trajectory. Indeed, the average price in the Kitchener-Waterloo housing market increased to $630,820 in 2020 (Jan. 1 – Oct. 31), up from $530,376 in 2019 (Jan. 1 – Dec. 31). With similar conditions expected to continue next year, the RE/MAX outlook for Kitchener Waterloo residential real estate in 2021 is an increase in average price of 7%, to approximately $674,977 across all property types.
Who’s driving the Kitchener Waterloo housing market?
Kitchener Waterloo’s current seller’s market should persist in 2021. Given the continued increase in average home prices over the course of 2020, it is expected that fewer buyers in 2021 will be able to afford and purchase at the same rate they did in 2020. The region experienced an influx of buyers coming from large cities such as Toronto, many of whom are looking for more outdoor space and backyards.
This has been a common trend across many Canadian housing markets as well as regions abroad, as homebuyers seek more square footage and green space outside of urban areas in the wake of COVID-19. Factors impacting this broader trend include the rise in remote work, the desire for more space and less density, as well as lower housing prices.
Most first-time homebuyers in Kitchener Waterloo are young couples in search of condominiums. Next year, the dramatic decrease in inventory, and increase in demand and home prices may cause some difficulty for first-time homebuyers looking to get into the market. Similarly, move-up buyers are also facing higher prices and limited supply, which will make purchasing a new home difficult in 2021.
The demand for luxury properties continues to grow, along with the demand for the new construction market.
The top neighbourhoods in 2020 and prospectively in 2021 in Kitchener Waterloo are Pioneer Park/Doon, Laurentian Hills/Country Hills West, and Uptown Waterloo.
Canadian Housing Market in 2021
Canadians are on the move. RE/MAX isn’t calling this an “exodus,” but the re-location trend across the Canadian housing market is real, and it’s just one focus of the RE/MAX 2021 Housing Market Outlook Report. RE/MAX Canada anticipates healthy housing price growth at the national level, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing and widespread housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices.
Due to these factors, the 2021 RE/MAX 2021 outlook for average residential prices is an estimate of +4% to +6% nation-wide. Here’s the regional break-down:
Additional report findings include:
- 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
- 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
- Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
- 52% of Canadians believe real estate will remain one of the best investment options in 2021
“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”
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