Home prices in this hotspot Ontario city have risen by over 30% in just one year

Those looking for cheaper home prices beyond the 416 might be surprised to learn that things aren't a whole lot more affordable in other municipalities around Ontario.

It may not be witnessing the same meteoric home price growth as Toronto's sizzling real estate landscape, but Kitchener-Waterloo is very much a seller's market, with one home type even seeing prices rise by over 30 per cent over the last year.

Like practically every city in Ontario, a pressing lack of supply is driving up demand, and with it, costs. This imbalance fuelled double-digit percentage growth in the 2021 prices of townhomes, and single-detached homes, while condo prices also saw significant gains.

According to RE/MAX's Canadian Housing Market Outlook for 2022, townhome average sale prices experienced the most dramatic increase last year, soaring 32.2 per cent from $469,212 in 2020 to $620,587. Single-detached homes followed close behind, jumping 26.8 per cent from $719,723 in 2020. Condos had an average selling price of $440,022 representing a 10.8 per cent leap over $397,294 in 2020.

And the KW market can only expect home prices to push further out of reach, the average home price of $785,607 for the first ten months of 2021 currently projected to rise by another six per cent to $832,743 this year.

The region is still comparatively affordable when looking at the exorbitant big city prices seen in Toronto real estate reports, but these same high prices are fuelling an urban exodus to smaller markets like KW. In addition to the first-time homebuyers priced out of other markets, foreign buyers are also contributing to this local boom.

Young families are scooping up new construction homes, specifically the booming townhomes that continue to appear in great numbers across the region. Younger couples have been gravitating toward condos in the region, this option remaining somewhat affordable over the local competition.