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Population and Housing
#91
Meanwhile, literally the day before, the Record had this article:

Average home price in K-W up $100,000 in just three years
Quote:WATERLOO REGION — The average price of a home in the Kitchener and Waterloo area has jumped $100,000 in just three years.

Monthly statistics released Friday by the Kitchener-Waterloo Association of Realtors showed the average price of all residential properties sold through the association's Multiple Listing System in January was $421,104.
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In January, 2014, the average stood at $321,591. Those statistics include sales in Kitchener, Waterloo and Woolwich, Wellesley and Wilmot townships.

"Demand continues to be the driver for the increase in the average sales price," association president James Craig said.

"It just speaks to the lack of supply," he said. "It's forcing more people to compete for the product that is out there."

And let's go back to the rental oversupply apocalypse article for a second:

Quote:Landlords may have to resort to incentives to rent older buildings. Other units could be taken off the market as students choose new buildings with more amenities that are closer to campuses. This could reduce the number of basement apartments, small apartment buildings, houses or rental condominiums.

A rental house that gets taken off the market doesn't just sit vacant. It gets sold to a new owner. There's already been evidence for a few years of rental houses reverting to owner-occupied.

It's all related, people! There can't be a supply crunch and catastrophic oversupply at the same time! Okay, maybe at some point, some people will have to come to terms that they can't buy the perfect detached house in the perfect neighbourhood for a bargain price tag. That's life. But the housing market is not a completely inelastic beast. If there really is a glut of housing near the universities, then eventually rental prices will start to move, not just near the schools, but across the city, opening up more non-ownership options.
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#92
I feel a good letter to The Record coming on from you Markster...
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#93
5000 extra beds (plus more in the pipeline) could mean between 500-1000 single-family homes/townhomes that could become available if they were all taken off the rental market at the same time. How does that compare with the typical single-detached housing starts for the area?
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#94
Something doesn't seem right about that math. If you have 5000 extra student apartment beds, that doesn't necessarily mean that you will have 1000 more single family homes available. Won't you also end up with a bunch of student apartments that are unrentable because there simply aren't enough students to fill them? Are we approaching the point where there are literally more apartments than there are renters to fill them? Isn't it possible to have a glut of a specific type of apartment while experiencing a shortage of another?
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#95
(02-06-2017, 02:37 PM)timc Wrote: Something doesn't seem right about that math. If you have 5000 extra student apartment beds, that doesn't necessarily mean that you will have 1000 more single family homes available. Won't you also end up with a bunch of student apartments that are unrentable because there simply aren't enough students to fill them? Are we approaching the point where there are literally more apartments than there are renters to fill them? Isn't it possible to have a glut of a specific type of apartment while experiencing a shortage of another?

I think most students prefer the northdale high rises, and they appear to have no issues with being rented. This certainly appears to be true among friends that are still in that rental market, with many telling me they pay $650-700/month for one bedroom with roommates in the towers near the university. Very few students seem to actually prefer living in houses in lakeshore, beechwood, etc.

So, it's true that if enough students preferred houses over the towers then we could see empty towers and no new availability of houses, but I don't think this is actually the case. Friends that rent houses in those neighbourhoods only do so because they're cheap, and not because they prefer it. I think we'll see more tower construction reduce prices for towers as supply catches up with demand for close to campus living, and houses converting back to owner occupied as they become more profitable to sell than to rent to students.

I'm also not sure I buy the argument in the article that demographic trends means there will be declining enrolment. That might be true on average, but I expect its effects will be felt unequally by universities. UW already has enough programs that have 95%+ high school average cutoffs because demand far exceeds available spaces (this includes programs that take hundreds of students each year). I predict UW's prestige will keep it at least as full as it is today, with a slight decline in marks required.
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#96
(02-06-2017, 03:05 PM)taylortbb Wrote: So, it's true that if enough students preferred houses over the towers then we could see empty towers and no new availability of houses, but I don't think this is actually the case. Friends that rent houses in those neighbourhoods only do so because they're cheap, and not because they prefer it. I think we'll see more tower construction reduce prices for towers as supply catches up with demand for close to campus living, and houses converting back to owner occupied as they become more profitable to sell than to rent to students.

Yeah, worst case, we'll see an oversupply of campus towers finally leading to a drop in rental prices near campus. (A drop that so far has not materialized.)  When I started university in 2003, rents were ~$400/month/bed.  People told me that a few years before, they could find $300 or lower. There's a lot of room for price deflation.

Basically every student living in Lakeshore is living in housing that was never really intended to be "student housing".  There's a lot of townhouses and low-rise walkups still available to convert back to single-family.
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#97
(02-06-2017, 03:05 PM)taylortbb Wrote:
(02-06-2017, 02:37 PM)timc Wrote: Something doesn't seem right about that math. If you have 5000 extra student apartment beds, that doesn't necessarily mean that you will have 1000 more single family homes available. Won't you also end up with a bunch of student apartments that are unrentable because there simply aren't enough students to fill them? Are we approaching the point where there are literally more apartments than there are renters to fill them? Isn't it possible to have a glut of a specific type of apartment while experiencing a shortage of another?

I think most students prefer the northdale high rises, and they appear to have no issues with being rented. This certainly appears to be true among friends that are still in that rental market, with many telling me they pay $650-700/month for one bedroom with roommates in the towers near the university. Very few students seem to actually prefer living in houses in lakeshore, beechwood, etc.

So, it's true that if enough students preferred houses over the towers then we could see empty towers and no new availability of houses, but I don't think this is actually the case. Friends that rent houses in those neighbourhoods only do so because they're cheap, and not because they prefer it. I think we'll see more tower construction reduce prices for towers as supply catches up with demand for close to campus living, and houses converting back to owner occupied as they become more profitable to sell than to rent to students.

And if the prices do drop on the Northdale tower rentals, even more students will be drawn there rather than living further afield.
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#98
If every post-secondary student in Waterloo Region were to end up living in higher density building, that would potentially release a lot of lower tier housing stock onto the market. But that will never happen because that is not where the money is. Putting up a high density tower takes a lot of capital which means either a company with deep pockets, or a company that convinces a lot of small investors to buy units. There will also likely be small investors who prefer to buy a single-family home or townhouse and then rent it to their children and friends. Since these rents are likely tied to mortgage payments, I doubt that an investor-owner is going to be willing to lower their prices.

Out of curiosity, how to the Waterloo Region rents of $500-$700/bedroom compare to other cities? As long as $500-$700/bedroom appears to be cheaper than a big-city rent, there will likely be lots of incoming students who continue to see that rent as a bargain price, regardless of the actual quality of the space.
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#99
(02-13-2017, 12:32 PM)nms Wrote: Since these rents are likely tied to mortgage payments, I doubt that an investor-owner is going to be willing to lower their prices.

No landlord wants to rent for less than $[mortgage+maintenance], but if there really is a supply glut coming, then it's preferable to a vacant unit earning $0. Also, there's a bit of wiggle room, since an investor is also counting on capital appreciation. Renting for less than $[mortgage+maintenance] can still be profitable in the end, but you're effectively sharing the capital gains with your renter.

Again, this is based on the premise that there really is a supply glut in the future. If not, then there will be no problems maintaining rents at $700/bed.
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Exactly. A lower rent is still better than no rental income at all. Once supply significantly exceeds demand, I am confident that we'll see price erosion until the demand and supply reach equilibrium again.

I do believe that most of the Northdale student rental buildings (and especially the 4/5-bedroom ones) are company-owned rather than condominium corporations. Whether those companies have "deep pockets" is something that's more difficult to determine.
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A bedroom here in Thunder Bay is about $500, so I don't see prices in Waterloo dropping to $300-$400 since Thunder Bay is a no growth city with a much lower ranked university. Waterloo does have the advantage of lower energy costs though.
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2016 Building Activity and Growth Monitoring
http://calendar.regionofwaterloo.ca/Coun...17#page=22

"The total value of building permits issued for new construction in Waterloo Region was $1.4 billion in 2016, a substantial increase of 36 per cent over 2015 values and more than 30 per cent higher than the 10-year average. The increase in building value was due to a spike in residential building activity in 2016, with permits being issued for 5,370 units, approximately 50 per cent higher than the 3,556 units in 2015. The value of these permits increased more than 60 per cent to over $1 billion. The largest component of residential building activity was apartments, with over 2,600 units, representing close to half of new units. Growth of student-oriented apartments remains strong, accounting for over 40 per cent of new apartments. Permits to build single-detached dwellings were up 55 per cent, with about 1,700 single detached units representing almost a third of new units.

Non-residential building permits were issued for 1.8 million square feet of floor space in 2016, with a total value of $250 million, compared to 1.7 million square feet worth over $315 million in 2015. In year-over-year square footage comparison, industrial square footage increased while the commercial sector tapered somewhat. The institutional sector was quieter in 2016.

Building permits indicate that 54 per cent of new residential dwelling units in 2016 were within the built-up area of the Region. This is the seventh consecutive year that the Places to Grow target of 40 per cent (which came into effect in 2015) and the Regional Official Plan target of 45 per cent have been exceeded. In addition, 62 per cent of new non-residential floor space was constructed inside the built-up area."
Everyone move to the back of the bus and we all get home faster.
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The ratios are less strongly high-density focused if we take student housing out of the picture. Without it, we have about 1700 houses, 950 townhouses and about 1500 non-student apartments. But the apartment/condo component is still strong, and will likely be strong again this year.
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http://calendar.regionofwaterloo.ca/Coun...017#page=5

"The Waterloo Region total population as of year-end 2016 is estimated at 583,500 people, including university and college students temporarily residing in the Region."

"In 2016, the population grew by 8,800 residents, a growth rate of 1.54 per cent, which was higher than the previous year, on par with the 15 year average of 1.53 per cent."


That's adding about 25 people a day to the region.
Everyone move to the back of the bus and we all get home faster.
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