Condo sales boom in Waterloo Region

November 02, 2010

WATERLOO REGION — Highrise condo sales in Waterloo Region are booming, thanks to young technology professionals and others who don’t want the hassles of property maintenance.

The region’s condominium market has been characterized by strong sales, steady demand and tight inventory this year, which has driven the condo prices up nearly 10 per cent, according to a report released Monday by Re/Max Ontario-Atlantic Canada.

Condo sales in the region are up 7.8 per cent this year compared to 2009, Re/Max said. It added that condos now account for almost one in every five homes sold in Waterloo Region.

That’s a trend the real estate company is seeing across the country. Sales in the Greater Toronto Area are up 10.4 per cent, with condos accounting for one of every three home sales. In Ottawa, sales are up 11.9 per cent. Condo sales are up six per cent in Hamilton Burlington.

The report said the year-to-date average price of condominiums in Waterloo Region is $201,732, compared to $183,986 a year ago.

First-time buyers are a driving force in the market. Entry-level units priced between $150,000 and $200,000 are being snapped up quickly, especially those close to the University of Waterloo, the report said.

Young people are seeing condos as a good investment, because if they can get something for around $200,000 the monthly carrying costs can be lower than the rental rates, the report said.

The also has been strong demand for condos in the downtown cores of Kitchener and Waterloo that go for between $250,000 and $400,000. That market is driven by young technology professionals as well as baby boomers who want to downsize.

Adrian Baas, broker manager at Re/Max Twin City Realty in Waterloo, said although townhouse condos are still selling well, the biggest boom has been in the highrise condominium market.

“The younger generation doesn’t mind living in a condominium highrise,” he said. “The white picket fence is something they might consider once they have the kids and the dog, but the trend seems to be for condos like the Kaufman lofts or the Bauer lofts in downtown Kitchener and uptown Waterloo.”

The two 25-storey condo towers at Westmount Road and Erb Street in Waterloo, expected to come on stream in 2012, have also seen strong demand, as have other condo developments in the Glasgow Street, Park Street and the Erb and Willow Street areas of Waterloo, Baas added.

This is happening despite the fact that in Waterloo Region “you can still get a reasonable, good, home somewhere around $250,000,” he said.

Condos are attractive to younger people who are interested in spaces that are trendy, in the downtown and close where the action is, Baas said. “They just don’t really care that much about landscaping and gardening. That is something might come later.”

Also, baby boomers are driving some of this market, especially in the higher price range. They are buying the new condos near the downtown core areas because they are looking to downsize and make their lives a little easier, Baas said.

Townhouse condos in higher price ranges, between $500,000 and $600,000, are also in demand but in limited supply, the report said.

Some baby boomers like to travel in the winter and “they just don’t want the upkeep of the 60 by 100 foot lot anymore,” Baas said.

Condo units close to the university are also going fast, with some new developments selling out in just one week, he added.

They are being purchased by young couples and also by out-of-town parents who see buying a Waterloo condo as an investment as well as a place where their children can live during the years they are attending university.

“Their children are staying here for four years and the rental market is going up by seven to ten per cent a year,” he said.

Baas said real estate in this region has generally done well despite the recession of 2008. Demand for single-family houses won’t decline, he said, but he expects that the condo market will become a bigger part of the residential housing market here.

The report said condos currently account for 18 per cent of the real estate sales in Kitchener and Waterloo and that will grow. Prices will also continue to climb because of the tight demand, the report said.

The reality is that “there is less and less land available,” so that will drive condo demand higher in the future, Baas said.

“We are growing up in the sense that we are realizing that we cannot just keep using good pieces of land. So most builders as well as potential buyers are seeing the benefits of the condos,” he said.

Content in full by Rose Simone @ www.TheRecord.com


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Julie D. Martin

Julie D. Martin

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CENTURY 21 Heritage House Ltd., Brokerage*
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