No signs of a slowdown for Waterloo Region's condo scene
Construction cranes and sales pitches make it obvious: condos are still a hot commodity in Waterloo Region.
Drew Dickinson, a Waterloo-based real estate agent, says he’s seeing interest in condos from several different types of buyers, including tech sector employees, parents of students, local landlords and even international investors.
“There is huge interest in the properties, especially because of the price point,” he said.
Putting his money where his mouth is, Dickinson has bought several condo units in recent years – most of them in downtown Kitchener – and rented them out.
He says the demand for his rental units is high enough that he can even turn down some interested tenants.
“I can be pretty picky when it comes to who I let rent or who I let into my properties,” he said.
Dickinson’s portfolio includes a one-bedroom unit at the One Victoria development, at the corner of King and Victoria streets.
When it’s ready, he expects the 657-square-foot unit to fetch $1,450 per month in the rental market.
That’s significantly more than the going rate for a one-bedroom unit in Waterloo Region, which the Canada Mortgage and Housing Corporation says stood at $850 in 2015 – well up from $740 five years earlier.
One Victoria was conceived by Momentum Developments, which has also started taking pre-orders for units at One Hundred, a similar condo tower planned for another location on Victoria Street, a few blocks south of King.
In total, the two towers are expected to bring 500 new condo units to downtown Kitchener.
Brian Prudham, a partner in the company, says One Hundred has already sold more than 80 per cent of its units, even though ground hasn’t been broken on the project yet.
“The employment is growing faster than the residential developers are providing the units,” he said.
“We don’t see a slowdown anytime soon.”
Mortgage broker Jeff Reitzel agrees that the condo market is on the upswing, but says he doesn’t see the skyrocketing growth that others in the industry have lauded.
“I wouldn’t consider it a condo boom,” he said in an interview.
“Some of those condo projects are good investments, but a lot of the time it’s people speculating – buying a condo thinking that in two years, before it’s built, they could resell it and profit.”
Reitzel says most local homebuyers he’s seeing are opting for detached or semi-detached homes, with the bulk of the condo activity being fuelled from outside the region.
He says that what he sees as “steady, sustainable growth” is actually better than a sudden surge in condo sales, because it bodes better for the market’s long-term future.