Why We Expect Local Kitchener - Waterloo Condos to Keep Generating Great Returns

Why We Expect Local Kitchener - Waterloo Condos to Keep Generating Great Returns

By Condo Culture

Condo investments continue to be outstanding across Kitchener - Waterloo, Guelph, Cambridge, and in other markets we serve.

There are several reasons why we have seen incredible condo investment sales price growth over the past few years, and the fundamentals will remain in place long-term, so we project the solid growth to continue in the years and even decades ahead.

In the video below, Tim outlines a few key points as to why your portfolio should include condo investments from the Kitchener - Waterloo area.

Are you too late to the condo investment party? Not at all, as this is only the beginning! See why that’s the case below and also why we are seeing more capital flowing here from markets like Toronto.

Population growth

There were 150,000+ new people that made Ontario their new home in 2021, and the Kitchener - Waterloo area pulled in a decent number of these individuals and families. In the next 30 years, this area is expected to grow by more than 360,000 people, or on average, 12,000+ people per year, so building lots of new homes every year will be crucial for the foreseeable future. Investors today can really take advantage of the population growth and do extremely well knowing that demand is only getting stronger in the Waterloo and Wellington Regions, and supply will almost certainly never catch up.

Supply and demand are worlds apart

Some near-future developments, such as The Birches (see our brand new preview video of it below), for example, have 84 units available and there is a potential buyer list in the thousands now hoping to get an opportunity to buy. This isn’t a one-off story either, we are seeing the same dynamic happen with other pre-construction developments also. Supply and demand always dictate marketing pricing, and in this area, supply will continue to be in short supply and demand will continue to hold strong.

Building up more so than out

The fringes of the Tri-Cities and Guelph are experiencing some residential growth in the form of new housing developments, but the city limits have been now reached for the most part. From a population growth standpoint, the area is highly reliant on condo buildings and they can’t be built fast enough.

First-time home buyers who once dreamed of buying a house are now looking to townhomes and condos as they are much better value plays with the average detached house resale price in KW sitting at $1.1M as of January 2022. The average apartment-style condo in KW costs an average of $537K as of January 2022 and a townhome is $850K. These two options are much more affordable and urban settings are where condos typically are located - providing superb lifestyles to enjoy with so much to see and do just steps from most buildings. Building equity through real estate is always a great idea, and all types of buyers are able to leverage condos as an attractive platform to do that.

Companies love the community and talent here

We are seeing more and more technology organizations put down firm roots in the KW area, especially in urban settings where a plethora of talented workers live. These urban areas are flanked by condos and townhomes, and more of these valuable developments will be critically important going forward as tech professionals seek out quality housing options. Google, Shopify, D2L, Vidyard, and hundreds of other technology startups and mature enterprises are expanding their footprint here, and it’s attracting world-class talent who earn significant salaries.

KW is now renowned for its technology firms, but more traditional industries including finance have been prevalent in the area for a long time. Sun Life’s Canada head office has resided in Waterloo for 110 years and has 3,500 employees, and Manulife’s head office for Canada is also in Waterloo and has been a local staple since 1988.

Manufacturing is also a key cog to the local economy with Toyota and Lexus plants in Cambridge, and another Toyota plant is just a 30-minute drive down the 401 in Woodstock. Collectively these plants employ several thousand people, and Toyota is considered one of the top 100 companies to work for in Canada.

Construction jobs are being rapidly created like never before also in the region as low-rise, mid-rise, and high-rise condo buildings are going up faster than ever before. Condos are not only becoming a primary source of housing options in KW, but it’s remarkable to also see a high number of well-trained construction workers being hired and making their way into the community, as well. There are so many different industries that are doing incredibly well here now, and it makes us so proud to see this area’s growth and diversity reaching unprecedented levels year over year.

A world-class city in the making

With everything that’s happening in the area including the explosive population growth, a wealth of tech companies either being headquartered here or expanding their operations, quality jobs being created like never before, public transportation extending its reach by a significant amount, real estate flourishing, and everything else points towards KW becoming a player on the international stage. We are getting closer to reaching a tipping point here, and condo investors can capitalize right now.

Pre-construction investments are highly coveted

TheJake Pictured above: A new exterior building rendering of The Jake.

Our investors who have bought pre-construction units in previous years are seeing their deposit money growing by 50% or more annually. Once these units are ready to be resided in, they can be then leased out to tenants to generate rental income, the mortgage principal amount is decreasing month over month thanks to that healthy cash flow, and appreciation is shooting up 30% or more each year. There’s no doubt about it, pre-construction is highly regarded by investors, and many are reinvesting profits into new pre-construction units when previous ones are sold. We are expected to see over 2,000 new pre-construction condo units sell this year in 2022 from developments including Station Park, Moda, The Birches, The Jake, Q Condos, The Metalworks, Wallaceton, 55 Baker Street, TEK Tower, Strata, Viva Towns, Six Sixty, and other buildings in KW and Guelph that have yet to be named. Be sure to get on our One List mailer to get updated as new developments launch.

Toronto and GTA investors are shifting their money west to KW

Condo investors in Toronto and the GTA are allocating an increasing amount of capital in the Kitchener - Waterloo area because they know their money goes a lot further here. Over $1,000 per square foot for condos is now commonplace in the Toronto market. Investors are always looking for better value and they are finding it locally here where prices are, on average, $556/sq.ft. for townhouse condos and $668/sq.ft. for apartment-style condos*. Resale prices in KW, on average, are 60% of those in Canada’s largest city, while still attracting approximately 80% of the rental income, so the condo investment economics are very favourable.

Running some condo market pricing numbers

To illustrate the unbelievable condo sales growth, we have put together a chart that breaks down the average pricing numbers for the Tri-Cities, Guelph, and Toronto over the last year.


It should be fairly clear now as to why local condo investments are extremely appealing. Do you have aspirations to invest in Kitchener - Waterloo, Guelph, or Cambridge condos in 2022? If so, let’s discuss your potential options, get in touch with us now so our helpful team can show you firsthand how everything works from start to finish. Cheers to your success!

*Average price per square foot statistics from the Kitchener - Waterloo Association of REALTORS® for apartment-style condos and townhouse condos from January 2022. Source - ITSO Real Estate’s MarketStats portal on February 8, 2022.

**Average sale price statistics from the Kitchener - Waterloo Association of REALTORS® and cities of Guelph, Cambridge, and Toronto for apartment-style condos and townhouse condos from January 2021 to January 2022. Source - ITSO Real Estate’s MarketStats portal on February 8, 2022.

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