Toronto buyers drive real estate prices up in Cambridge, Kitchener, Guelph
Industry watchers predict Toronto buyers will continue to drive prices up in Waterloo Region's already red-hot real estate market, even as "for sale" listings traditionally slow in the winter.
It follows a summer that delivered month after month of record-breaking sales figures in Waterloo Region fuelled by low interest rates, a strong local economy and a steady influx of buyers from the Toronto area, priced out of an increasingly expensive big city market.
Benjamin Tal, the deputy chief economist with CIBC World Markets, said as the price real estate mushrooms in Toronto, young couples are now willing to go further afield to get themselves a slice of the Canadian dream.
"They simply go on the 401 and start driving until they find something they can afford and then they stop and we're seeing a lot of this now," he said.
905 becoming too expensive
They used to stop in Mississauga and Hamilton, but thanks to climbing housing prices in the 905, those couples are now stopping in Guelph, the north end of Cambridge or Kitchener's south end.
Tal said a high-speed internet connection seals the deal, with employees able to work at home most days, opting to brave the traffic-clogged 401 to reach their big-city office once a week.
"Technology is simply changing the face of real estate," Tal said. "You can live in Kitchener in a reasonable house that you want to live in, at an affordable price and still keep your job in the GTA."
It means the new arrivals are re-writing the rules of real estate in Kitchener-Waterloo, turning the spring and summer into a season of bidding wars beginning in May and reaching its crescendo in August.
Most active August on record
In its latest report, the Kitchener-Waterloo Association of Realtors said 598 homes were sold last month, making it the most active August on record in the twin cities, 26 per cent above the same time last year and 38 per cent above the five-year average.
In all, it's been one of the most active years on record for local real estate, with 4,703 home sales since the end of August, a level of activity 23 per cent above the five-year average.
Adding fuel to the fire is a tight housing inventory this summer, where there were roughly half the listings of last year.
All of this has pushed the average price of a single-family detached home in Kitchener-Waterloo to $487,050, up 21 per cent since the start of the year.
'Not enough homes'
"This year has been pretty steady," Molly Yetman, a Cambridge-based real estate agent told CBC News, noting the buying frenzy in Kitchener-Waterloo hasn't been limited to north of Highway 401.
She said Cambridge has also seen its own summer of bidding wars, triggered by an influx of GTA buyers who have been snapping up properties all over the city.
"When we're competing, we're competing with Toronto agents," she said. "It's been a problem in the fact that a lot of prices are being driven up and competing offers and homes selling for over asking price."
"So there's not enough homes to meet the needs of local buyers for the fact that now there's people coming in from out of town trying to buy the same houses."
"It's a little discouraging," she said. "[Clients] get a little deflated when they try and buy a house and they lose."
Broken-hearted four times
It's a story repeated in Kitchener and Guelph.
"It's six times more work to find the right home for the buyers because of the competition," Guelph-based real estate Laura Brennan told CBC News, saying bidding wars have brought nothing but bad luck for one pair of her clients in particular.
"They've lost out on four deals because the pricing keeps getting driven up," she said. "Try taking them out the next day or a few days later after they have a chance to regroup and show them something else when they've already had their hearts broken four times."
"And that's one couple," she said. "There are many couples."
Brennan believes prices in Guelph, Cambridge and Kitchener-Waterloo will stay, especially as the pace of sales slows as it traditionally does in the autumn and winter months.
"Unless the inventory listings start coming out, they're not going to be able to buy if it's not available," she said.
Originally posted in the CBCNews
Thinking of buying or selling a property, or have a question regarding the real estate market? Fill out the form below and I'll get back to you promptly.