2009 Kitchener Waterloo Investment Real Estate Market Update

By Benjamin Bach, the Wealth Team on January 11, 2010 in Featured Articles, kitchener waterloo, Real Estate Investment

2009 was an interesting year to be buying, selling, and brokering investment real estate and apartment buildings.

The turbulence in the global credit markets put a halt on a lot of lending, especially mortgages for student housing and ‘non AAA’ multi-family property. When CMHC stopped insuring loans on ‘student housing,’ many lending institutions and banks stopped lending against those assets, since without CMHC insurance the loans were harder to sell on the secondary market.

There were 148 Multi Family & apartment building sales on MLS or $94 million volume in 2009, which is down 21.7% from last year.

While volume was off more than 20% from 2008, the value of Multi Family sales was down just 2% this year, reflecting a number of larger sales.

Specifically, there were nine apartment buildings, student rental towers and townhouse complexes that closed for over $1,000,000 in ‘09 on the KW MLS, including a $28 million dollar tower on King Street in Waterloo that was purchased by investors represented by our firm, Keller Williams in Kitchener.

In addition to a lack of financing, another reason that sales were down last year was that buyer’s were looking for higher cap rates, while sellers still wanted top dollar. In Canada very few owners of Multi Family properties are ‘distressed’ and need to sell like we sometimes see in the US; that means they have cash flow coming in, rental income from their tenants, and can often afford to wait for a buyer to recognize the value and reach an agreement on price and terms.

There were 398 Multi Family listings processed through the MLS in 09 down 22%