The Waterloo Real Estate Market: A Guide For Investors

May 16, 2016 - 6 minutes read
 

By: Matt elkind

This week we are taking a break from our four-part Condo Investing Secrets series to talk about an important market for condo investors.

The City of Waterloo is one of our favorite investment hot-spots because of its strong growth prospects. When you think of Waterloo, many people cite it as the home of Blackberry and two world-class universities: Wilfrid Laurier University, and the University of Waterloo.

But, that’s not where the Waterloo story ends, it’s where it begins.

Waterloo: Strong Economics and Population Growth

Waterloo has been affectionately referred to as Silicon Valley North, and rightly so.

According to one report, Waterloo is one of the most educated cities in Canada and has a population that is younger than the national average.

The University of Waterloo notes that 182 entrepreneurs who have graduated from their university have raised a total of $2.6 billion of venture capital following graduation. It’s no wonder that Waterloo is synonymous with innovation.

“Waterloo Region already has one of the largest concentrations of post-secondary students in Ontario.” – CMHC Housing Outlook – Spring 2015

But Waterloo is not just reliant on the hi-tech industry, there is a strong insurance industry presence as well. Waterloo is home to two major insurance providers, Manulife and Sun Life. The two companies employ over 7,000 people in the area.

And job growth isn’t going anywhere. According to a recent Employer One survey, 81 per cent of Waterloo Region employers hired in 2014, and 71 per cent of employers planned to hire in 2015.

For March 2016, there were 3,100 more full-time jobs compared to February 2016.

People are flocking to the Waterloo area. Between 1991 and 2014, Waterloo experienced an astonishing 85 per cent increase in its population, from 71,000 to 132,300.

The region is also developing a new $818 million LRT system, slated to open in 2017. This will connect Waterloo, Kitchener, and Cambridge.

This population influx and transportation expansion have fostered a healthy and thriving real estate market that continues to grow.

The Waterloo Real Estate Market

The [Waterloo] region didn’t need a whole lot more subdivisions of single-family homes…Instead regional politicians and planners believed the bulk of future housing had to be better suited to the region’s aging population: highrise and midrise condos close to stores, medical centres and amenities, where residents don’t have to climb stairs or do maintenance and no longer drive. – Toronto Star, March 20 2015

Let’s first digest some important 2016 Q1 real estate statistics from the Kitchener-Waterloo Association of REALTORS:

  • – There was a 16 per cent increase in year-over-year real estate sales in the area
  • – March 2016 ranked as the highest sales ranking for that month since 2010
  • – 2016 Q1 was the highest quarter for sales on record since 2010
  • – For condo’s, 2016 Q1 sales were up 26 per cent

According to CMHC: “The vacancy rate declined to 2.3 per cent in 2014. Strong demand from immigrants, young households and seniors will translate into the need for new supply.” The same report indicates that the vacancy rate will remain relatively unchanged at 2.5 per cent into 2016.

In reference to the slight increase in vacancy rates in Waterloo, CMHC notes: “students will be attracted to the newer buildings, thus creating vacancies in older stock, including basement apartments and houses.”

For some types of condo suites, such as a studio, the vacancy rate is even lower than in Toronto.

This is where Sage Platinum condos come in, and you as an investor can take advantage of the above market drivers.

Waterloo Condo Market: An Insider Look At Sage Platinum

“We believe there’s this future where Waterloo is one of the top cities for technology in the world,” – Ted Livingston, CEO of chat app Kik, Canada’s largest homegrown social media company.

SAGE - Waterloo Real Estate Market

Sage Platinum is a 104-unit condo development located in the heart of Waterloo by IN8 Development. IN8 have successfully sold 6 new student housing developments in Waterloo to date, and Sage Platinum is their most promising yet.

Sage Platinum is located directly next to Wilfrid Laurier University and is a short walk to the University of Waterloo, the Technology Park, and LRT. The development consists solely of studio, and 1 bedroom units.

The vast majority of housing around the Universities has been focused on larger units typically 3 to 5 bedroom units. While economical, these units fail to provide an optimal living experience. As a leader in the luxury furnished rental market for over a decade and renting thousands of beds, IN8 Developments started reducing the number of bedrooms and very quickly realized how strong the demand was for both rental and resale markets.

And one of the best thing about a Sage condo is that you get two years of free property management and a free furniture and appliance package. These features make your life as an investor even easier.

For more information on this important opportunity, check out the Sage Platinum website.

Matt Elkind, Co-Founder CONNECT Asset Management

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