Average prices climbed 9.3 per cent

Residential real estate provided a solid return on investment in 2019 in Kitchener and Waterloo, with average prices climbing 9.3 per cent.

Sales volume only increased slightly, with 5,925 transactions representing a 1.6 per cent increase over 2018, according to the Kitchener-Waterloo Association of Realtors. That’s three per cent above the previous 10-year average, but 2.3 per cent below the past five-year average, accounting for the overheated markets of 2016 and 2017.

“We hit near 6,000 transactions, which is very, very strong for Kitchener-Waterloo,” new association president Colleen Koehler said.

December sales slipped nine per cent compared to 2018, with 244 sales.

The average price for all residential properties sold last year climbed to $527,718. Detached homes were up 7.1 per cent to an average of $614,743. The median price of all properties rose 10.1 per cent to $490,000, while the median price of a detached home increased to $570,000, a jump of 8.6 per cent.

Lack of supply continued to fuel a sellers’ market that pushed prices higher. “We’re continuing to see a steady stream of people moving into the area,” Koehler noted.

New arrivals — often leaving behind the higher-priced Greater Toronto Area for the relative affordability of Waterloo Region — might sell property elsewhere but compete here for a limited supply.

With the local population expected to continue climbing, and interest rates remaining low, Koehler expects a similar market this year, with prices and sales volume on the rise. “There’s no indication that things are going to slow down,” she said. “People want to be here.”

Inventory remained well below average levels throughout 2019, with the number of months of inventory averaging 1.5 for the year. That’s a measure of how long it would take to sell existing inventory at the current pace.

Historical norms for the region are in the three to four-month range. The highest level reached last year came in May, with 2.1 months of supply, dropping to a year-end low of just 0.7 months.

It took an average of 23 days to sell a property last year, down just a day from 2018. The previous 10-year average was 38 days.

The only category of homes to see an increase in sales last year was detached homes — 3,590 sales represented a 5.9 per cent increase over 2018. All other categories declined. Sales of condominium units were down 7.8 per cent (648 sales), townhomes dropped 3.7 per cent (1,266 sales), and semi-detached homes declined 0.7 per cent (421 sales).

It was a different scenario when it came to price, with strong increases across the board. The average price for apartment-style condos rose 9.6 per cent to $332,409, while townhomes were up 10 per cent to an average of $409,979. The average price for semi-detached homes climbed 11 per cent to $439,844.

Local realtors are handling residential leases far more than they used to, with 733 leases signed via the association’s Multiple Listing System last year — that’s an increase of 2.5 times in about four years.

“All of a sudden this rental market is becoming hotter and hotter,” Koehler said. A real estate market with fewer choices and rising prices means people may have to look at different options.

“They have to have a pretty solid plan. They have to be a little more realistic.”