A Complete Guide to Investing in Kitchener-Waterloo Real Estate
Greetings, and welcome to the WRX Property Group website and blog. Today, we’re going to take a look at why investing in Kitchener-Waterloo real estate is something truly worth considering.
We’ll start off by looking at each city individually, and analyzing the aspects that make them suitable for investment: the unique characteristics that ensure that not only are they flourishing economically right now, but likely for the foreseeable future, too.
Before investing in real estate, there are two major things most people want to make sure of: that it’s a safe investment, and that it’s a lucrative investment. And Kitchener-Waterloo’s unique traits, locations, and initiatives combine to make it both a safe place for investors, and a profitable one.
We’ll begin by looking at Kitchener, addressing its downtown development, condo developments, tech startups, and the LRT. Next, we’ll look at Waterloo, addressing its universities, student rentals, tech startups.
And finally, we’ll analyze Kitchener-Waterloo specifically from an investor’s perspective, analyzing the general investment climate in the region with a mixture of analysis and relevant data from expert sources.
If you’re thinking about investing in Kitchener-Waterloo, we hope to provide you with enough background information and analysis to assist you on your decision-making process.
For locals to the region, some information might already be familiar to you, and so we’ll start with a concise guide on where some of the best opportunities to invest in real-estate are, before moving on to the cities themselves, and finally wrapping things up with an overall assessment of the overall viability of investment throughout Kitchener-Waterloo.
Specific Areas in Kitchener to Consider Investing In
In Kitchener, there are two areas of distinct progress that investors would do well to investigate. Of course, the entire city is growing, but two regions specifically stand out as sound investments. Those are the southwest corner of the city, and the downtown core.
Quite simply, southwest Kitchener is growing rapidly: there are new housing developments being built steadily, new schools opening in the area, and many opportunities to get in on the ground floor, so to speak (before the ground floor’s even been built!).
Southern Kitchener, around the Doon area, also benefits from its proximity to Conestoga College; again, many new neighbourhoods are being built here, meaning many opportunities to invest. Downtown Kitchener is in a tremendous phase of development and progress.
Numerous new condominiums are opening over the next few years, old buildings are being converted into upscale apartments/condos, and there are more and more options by which savvy investors can profit from this forward and upward momentum.
Downtown Kitchener is a site of major investment, much from large development firms and from the City itself, and it’s become a haven for a large number of successful tech startups. Finally, the LRT (which runs from Fairview Park Mall up through Downtown Kitchener and north to Waterloo) is predicted to have a very positive effect on Kitchener’s economy, and the values of properties along the LRT route are likely to see a noticeable increase.
Specific Areas in Waterloo to Consider Investing In
Kitchener-Waterloo benefits from having not one but two downtown cores, though the one in Waterloo is known as Uptown. Like Downtown Kitchener, Uptown Waterloo is an incredibly viable location to consider real estate investment, as Uptown has long held a reputation as an upscale, exciting locale, attractive to a broad spectrum of interested parties.
A major site of opportunity for investors is the areas surrounding both of Waterloo’s universities; these areas will always be hubs of activity, and though student housing is often the idea that comes up first, there’s also the numerous various staff and faculty looking to live near the campuses.
The Beechwood area, for example, features a competitive, higher-price point market that benefits from close proximity to the University of Waterloo. The areas within and around Columbia Street West, Weber Street North, Erb Street West, and Westmount Road North are perennially good options for student rentals, and thus a stable area within which to find an investment property (or properties).
Adding to the pool of available finances and overall regional stability is Waterloo’s own incredibly successful startup climate; fuelled by the universities, Waterloo continues to be a leader in the tech industry, meaning the city is likely to continue soaring economically for the foreseeable future.
The LRT runs through Uptown and up north to Conestoga Mall; again, the residential and commercial areas adjacent to the LRT tracks are likely to prosper from the rapid transit service, and therefore strong contenders for potential real estate investment.
Now, let’s move on to a closer analysis of the two cities, starting with Kitchener.
Kitchener is a city in southern Ontario. It sits alongside the Grand River, between the cities of Waterloo (which makes up the entirety of its northern border) and Cambridge (which borders Kitchener to the southeast, across the swift Speed River).
The Townships of Wilmot and North Dumfries make up its western and southern borders, respectively. Kitchener and Waterloo together constitute the Twin City of Kitchener-Waterloo, and collectively with Cambridge, the three make up the Tri-Cities (they are connected in many ways, though each has its own, separate municipal government).
Kitchener’s population is 233,222, as of the Canada 2016 Census, placing it among the top ten Ontario cities in terms of overall population. But the number you’ll often see referenced is that of the Regional Municipality of Waterloo (the Tri-Cities and the surrounding Townships of North Dumfries, Wellesley, Wilmot, and Woolwich): collectively, its population is 535,154.
The Waterloo Region is one of the most rapidly growing areas in Southwest Ontario, and its population is on course to surpass 700,000 in a decade. Those are the facts; let’s look at what’s going on within Kitchener to make it an area of so much growth.
Kitchener-Waterloo is becoming synonymous with the tech industry. Technology and innovation are indeed major factors in Kitchener’s rise to local, national, and increasingly international prominence. We’ll have more to say about the tech industry when we move on to the section devoted to Waterloo, but there’s plenty of tech innovation going on in Kitchener – and an abundance of opportunities.
To talk about the tech industry in Kitchener, though, we’ll first have to talk about downtown Kitchener itself. Indeed, much of what makes Kitchener a great investment opportunity centres around the downtown core and radiates outward (namely, tech startups, condo development, and transit).
Downtown Kitchener has always been a busy, bustling place – the popular Kitchener Farmer’s Market has been running on King Street since the mid-nineteenth century! – but in recent years it’s really been on the rise, as a place to live, a place to visit, a place to work, and a place to invest in.
The City of Kitchener itself, for example, has pledged to revitalize parts of Queen Street, and it has committed large sums of money to maintaining and developing the downtown core. The Downtown Kitchener Action Plan, which was started in 2012, continues to promote Downtown Kitchener’s rapid development, invest funds, and attract investors.
Over the next year, there are plans in place for 20 new developments valued at hundreds of millions of dollars cumulatively (indeed, potentially over $1 billion in total by 2019); these will provide ample new spaces for apartments, retail, offices, and condos.
These are some of the most important places for real estate investors to learn about; Downtown Kitchener has completed quite a few condo developments over the past couple of decades (including several converted historic buildings), but this new batch is poised to dominate the headlines and attention of the real estate world for the years to come.
Downtown Kitchener has that perfect blend of the historic with the cutting edge, and this intermingling of the old and the new is very much epitomized by the Lang Tannery Building. Let’s take a quick detour and hear its fascinating history before diving into its fascinating present.
The Lang Tannery Building dates back to 1849, when Reinhold Lang and his eldest son George founded the Lang Tanning Company and opened a small tannery in the town of Berlin (Kitchener’s name until 1916); they moved the tannery to its present location after a fire destroyed the original building.
The Lang Tanning Company would go on to become the largest exclusively leather-producing company in the entire British Empire (evidently, Kitchener was always one of Canada’s industry leaders – the industry just varied), and it supplied enormous quantities of leather during the World Wars (despite widespread prejudice against Germans at the time).
The company collapsed after the onset of synthetic materials in the 1950s, but the massive building – and its incredible location in the heart of downtown Kitchener – remained, eventually being sold to a development firm for a vast sum of money.
It seems like it might be difficult for the Lang Tannery Building to top its claim-to-fame as the one-time largest tannery in the British Empire, but it’s well on the way – some might say it’s already there.
As it stands, the Lang Tannery Building (often referred to simply as the Tannery now) is now the centre of Kitchener’s tech industry. And you can’t talk about the Tannery and Downtown Kitchener’s thriving tech startup scene without talking about Communitech.
Communitech was founded in 1997 by a group of forward-thinking innovators who saw the potential both in the Waterloo Region and Downtown Kitchener to be a leader in Canada’s tech industry. Today, it serves as the nexus of Kitchener’s tech industry; it’s a place where entrepreneurs come together and bring ideas to fruition; it’s a service centre for fledgling companies to learn the ropes and gain access to expertise, capital, and networking opportunities; and it’s very much a beacon signalling to the rest of the world that Downtown Kitchener is rife with potential.
The Communitech Hub consists of over 80,000 square feet of office and meeting space, ensuring there’s always room for a large number of up-and-coming experts and businesses, and established companies. Together with Google’s headquarters in Downtown Kitchener, Communitech and the tech startup culture mean there is a significant demographic of individuals adding to Downtown Kitchener’s development, and contributing to Kitchener’s economy.
The startups are aided in no small part by both the University of Waterloo’s educational and financial support – particularly UW’s Velocity program, which promotes and supports technology-based businesses – and the LRT.
Kitchener-Waterloo’s LRT program – called ION, after the Greek word for ‘going’ – is poised to deepen the already deep ties between Kitchener and Waterloo. The LRT will run from Fairview Park Mall all the way north to Conestoga Mall, which is already a boon to both cities, their populations, and the overall economy.
But importantly for the tech startups of Downtown Kitchener, the LRT makes getting from Downtown Kitchener to Uptown Waterloo and the environs of the university campuses even easier. Furthermore, the areas around the LRT route are great places for real estate investment, as they are likely to see flourishing economies and economic certainty in the years to come.
Indeed, many condo developments in Downtown Kitchener will be within walking distance of the tracks, underscoring the idea that the aspects that make Kitchener such an attractive place to invest in are all on display in the downtown core.
Waterloo is also a city in southern Ontario; it, too, sits alongside the Grand River, and it shares a long border with Kitchener to the south. The Townships of Wilmot, Wellesley, and Woolwich border it to the west, northwest, north and east.
Though Waterloo is the smallest of the Tri-Cities, its population of 104,986 (as of the Canada 2016 Census) is not insignificant. As discussed earlier, a big part of Waterloo’s identity is its relationship with Kitchener; there’s a reason people often refer to the area simply as Kitchener-Waterloo.
It’s important to remember, though, that they are separate cities, with their own distinct identities. That said, Kitchener-Waterloo can function as a fully self-sufficient unit, with students from either city attending the universities in Waterloo (University of Waterloo and Wilfrid Laurier University – more on them soon) or Conestoga College in Kitchener (it has a Waterloo campus, too), acquiring specialized skills, and settling and working in one of the two cities.
Talent and funds flow fairly freely between the two cities, aided in no small part by initiatives like the University of Waterloo’s Velocity Garage funnelling startup companies to Kitchener’s Tannery, and the LRT (and overall shared GRT service) making darting back and forth between the two cities a breeze.
It’s nigh impossible to talk about Waterloo, and what makes it tick as a city, without delving into the universities. Both Wilfrid Laurier University and the University of Waterloo began to take shape in the early to mid-twentieth-century, and over the years, they increasingly became sturdy pillars of the growing Waterloo Region.
Indeed, every year, the universities attract a student population of over 50,000 to the area. Wilfrid Laurier University presently has two campuses in Kitchener-Waterloo (and one in Brantford): the main, Waterloo campus is located just north of Uptown Waterloo, off of King Street North and University Avenue West.
This is the largest by far, with upwards of 15,000 students attending class here, and many living in the multiple Laurier-run student residences (particularly first year students). The large number of students transitioning from residence life to privately-renting apartments is a major factor in why Waterloo is an attractive real estate investment opportunity; student rentals are a huge source of revenue for investors, and there will always be a demand for it.
The second Laurier campus in Kitchener-Waterloo is located in Downtown Kitchener, off of Duke Street in the historic building of the former St. Jerome’s High School. University of Waterloo’s main campus is located just northwest of Wilfrid Laurier University, spread out around Westmount Road North and Columbia Street West.
It, too, owns and runs a variety of student residences in Waterloo; in 2014, 21.04% of undergraduate students lived on campus, and 65.42% of first years (UW Institutional Analysis and Planning). Again, a major takeaway from this information for potential Kitchener-Waterloo real estate investors is that every year, a very large swathe of undergraduate students will be looking for apartment or condo accommodation.
Not every investor wants to tap into the student market (or at least not the undergraduate market), but for those who do, opportunities in and around Uptown Waterloo are distinctly rife, and can be incredibly lucrative.
Beyond the student population, the universities bring a great deal of economic certainty and, moreover, the potential for sustained growth to Waterloo. Both Wilfrid Laurier University and the University of Waterloo are exceptional institutions, which have been excelling on various polls of late.
Maclean’s ranked the University of Waterloo 3rd best in its ‘Canada’s Top Comprehensive Schools 2018’ list (out of 15), and it placed 1st on the reputational survey. Maclean’s has also chosen the University of Waterloo as the Most Innovative University in Canada for 26 years running, and it consistently performs extremely well on international reports (particularly in tech-related fields like Computer Science and Engineering).
Wilfrid Laurier University came in at 6th out of 15 on Maclean’s ‘Canada’s Top Comprehensive Schools 2018’ list, a respectable score, and it also placed 1st overall for Student Satisfaction. The universities attract experts from a variety of fields (for example, over half of UW’s entering students have an average of over 90%, as of 2015) and together serve as one of the cornerstones of Waterloo’s economy.
They are also a major factor in why Kitchener-Waterloo’s become the driving force of Canada’s Technology Triangle, and part of why Kitchener-Waterloo has such strong ties to the GTA and rising communities like Guelph (Laurier, UW, and the University of Guelph are part of the Tri-University Group, which shares library resources).
Finally, the universities foster, enable, and in many cases finance the blossoming tech industry within Waterloo itself (and, as noted, Kitchener).
Waterloo is a city in which tech startups can thrive. Every year, graduates from the universities (and Conestoga College) serve as a trained, eager workforce that’s familiar with the local area. You need look no further than BlackBerry Limited (formerly Research in Motion, or RIM) to see the heights to which Waterloo-based, and Waterloo-educated, tech companies can soar.
BlackBerry was co-founded in 1984 by a University of Waterloo student, and its headquarters remain in the city. Waterloo is replete with successful tech startups, and this culture of innovation and technological development is a major factor – if not the major factor – in its recent rise to prominence on the world stage.
As noted, University of Waterloo’s Velocity Program is cultivating these tech businesses and helping them to thrive within Waterloo and beyond: they say it themselves Velocity is “the most productive startup incubator in Canada” (UW Velocity).
Beyond that, Kitchener-Waterloo has revealed itself to have the most prolific startup population outside of Silicon Valley, relative to size; with Canada’s economy looking to rely increasingly heavily on the tech industry, Waterloo is a very safe bet for real estate investors.
The Overall Investment Climate
In discussion about investing in real estate in Ontario, Toronto will inevitably come up. And it comes up with good reason – Toronto is the capital of Ontario, the largest city in Canada (indeed, it’s the seventh largest metropolitan area in all of North America), and a site of near constant development and expansion.
But Toronto is also quite expensive – often prohibitively so. If you’re looking to just get started in real estate investments – and even if you’ve been doing it for a while – Toronto takes a hefty initial investment, and because of this the stakes are accordingly raised.
This trend of an increasingly expensive real estate market is centred in Toronto, but it is also very much spread to the overall Greater Toronto (GTA) – communities like Oakville and Barrie, for example, are also expensive for prospective investors.
One area that lies just on the periphery of the GTA proper is in an interesting position of benefiting from the perks of Toronto, but being somewhat more shielded from the expensive price points: Kitchener-Waterloo, and to a different extent, Guelph.
But while Guelph is a city WRX Property Group very much believes in as well, it is a topic for another day. Today is Kitchener-Waterloo’s time to shine.
First, let’s take a quick look at what the experts are saying. The Real Estate Investment Network (REIN), an independently-run research and analysis organization (founded in Vancouver in 1992, with additional offices in Edmonton, Calgary, and Toronto) ranked Kitchener-Waterloo-Cambridge as second only to Ottawa in terms of real estate market performance and investment opportunities in Ontario.
And this has been true of the Tri-Cities for years: in 2014, REIN announced that Kitchener and Cambridge tied as the #1 best real estate investment markets, out of hundreds of towns and cities across Canada (Waterloo placed a respectable 4).
In 2015, Don R. Campbell, a real estate investment expert and founding partner of Rein, proclaimed the Technology Triangle of Kitchener-Waterloo and Cambridge as one of the three best markets to invest in – in all of Canada (beating out prominent cities like Calgary, Vancouver, and Montreal).
The bi-monthly publication Canadian Real Estate Wealth (the only one of its kind in Canada) released the results of its reader poll in January 2017, and Kitchener-Waterloo garnered an impressive 22% of the 534 votes (the GTA came in second with just 16%).
And really, this is just scratching the surface – we could go on, but the main point is simply that Kitchener-Waterloo is soaring in terms of real estate investment opportunities.
Kitchener-Waterloo is blossoming economically, and the climate of technological development and overall innovation is flourishing. It’s a boom time for investors, aided in part by the universities and college, by the City’s efforts to develop Downtown Kitchener, by the impressive LRT, and by the multiple condo development firms that see a bright future for the region.
Kitchener-Waterloo benefits from being close to Toronto, but far enough to not face prices quite as high, and with enough of a distinct identity and abundance of opportunities to enable it to stand tall on its own.
We at WRX Property Group very much believe in Kitchener-Waterloo, and we are proud to be based here in Kitchener. As always, if you have any questions, or if you’d like to have our experts go over investment opportunities and strategies with you – over email, by phone, or in person – please don’t hesitate to contact us.
We’re always happy to help, however we can.
Written by Will Kummer