When it comes to real estate in the Waterloo region, soaring prices have become the norm. As another record was shattered in January, housing economist Dawn Parker wasn't taken aback. It's not that $850,000 for a single-detached home is an insignificant amount, but it was something she had been anticipating for quite some time. The interesting twist, however, lay in the realm of apartment-style condos, where the average sale price actually decreased by 1.4 percent compared to the previous year. This decline was a first since the brief housing market slump in 2020.
According to Parker, this dip in condo prices is a reflection of her ongoing research. It underscores the fact that the local housing market has been failing to deliver apartments and condos that cater to the needs of families, downsizers, and those looking for modern urban living. The key issue, as Parker highlights, is the lack of larger units that can accommodate families, especially considering the region's rapidly growing population. This has led to what she calls the "missing middle" in the housing market.
Unlike major metropolitan areas such as Toronto, Chicago, Boston, and New York, which have always had a significant supply of high-density housing options, the early high-density developments in the Waterloo region were primarily factory homes. Parker draws a parallel between these factory homes and the grand urban apartment buildings often seen in popular TV shows like "The Marvelous Mrs. Maisel." However, developers have failed to perceive the demand for larger units, creating a cycle where the absence of suitable products in the market discourages family buyers.
Bruno Richter, a resident of the Kitchener-Waterloo area, sees no issue in raising a family in a two or three-bedroom apartment. He believes that personal backyard space is not necessary, but having a sense of community is crucial. His experience living close to Toronto's subway system taught him the value of good public transportation and its impact on urban living. Likewise, Parker emphasizes the importance of solid transportation networks, not just within downtown areas, but also in the suburbs. The goal is to create vibrant communities around transit nodes that offer a balance between work, play, and living.
In conclusion, the housing market in Waterloo region shows no signs of cooling off in the near future, and the industry needs to address the issue of unaffordable single-detached houses. As stated in a City of Waterloo report, these homes have become out of reach for all but the highest-income earners. The focus should be on creating alternatives that bridge the gap between detached houses and the limited supply of small apartment units. With careful urban planning and the integration of transportation networks, the region can cultivate a diverse housing market that caters to the needs of all residents.
Image: Crews work on a new condo tower in downtown Kitchener on March 9, 2020.