October 2014 Rental Market in Kitchener and Waterloo
According to CMHC (Canada Mortgage and Housing Corporation) the Waterloo Region vacancy rate has declined to 2.3% from 2.9%. "Although supply increased, demand increased more and the vacancy rate declined in the Kitchener-Cambridge-Waterloo CMA. Movement out of the purpose-built rental market into homeownership and new student housing was more than offset by new renter households generated by echo boomers moving out of their parents' homes, students and immigrants moving into the area and seniors downsizing… The number of new renter households exceeded the number of people leaving the rental market for a variety of reasons, including to purchase a home," said Erica McLerie, CMHC's Senior Market Analyst for the Kitchener-Cambridge-Waterloo and Guelph CMAs.
The vacancy rate is now at the provincial average of 2.3% although Zone 4 in Waterloo recorded the highest vacancy rate in the CMA at 3% primarily because the new student development in the works. It is expected for this number to drop after more units are completed and occupied next fall.
Kitchener East (Zone 1) was one of the zones with the most additional units in 2014, but did not contribute to a higher vacancy rate, in fact the vacancy rate fell to an attractive 2.1% from 3.5% a year earlier.
What does this mean for the average investor? Even with the incredible growth of 557 additional units
, there is still a demand for rental housing and that demand is increasing. Zone 1 in Kitchener continues to be an attractive area to invest in rental housing especially with the LRT expected in 2017 creating a more accessible region.
It is to be acknowledged that more than half of the new rental completions were ineligible for the Rental Market Survey as they were student housing, rented by the room. You will find however that this type of housing does compete with purpose built rental accommodations.
As always, if you have any questions about the rental market or anything related to real estate, don’t hesitate to send me an email or give me a call.
The full report can be found HERE