Recently I was interviewed by the Canadian Real Estate Wealth magazine to discuss the Guelph real estate market and reasoning why it’s been, and continues to be, a great place to invest. Here are the questions and answers from the interview:
Why is Guelph a great place to invest in right now?
Guelph is just plain consistent across the board with all the metrics that make for a reliable investment. Vacancy rates are currently 1.9% and have remained below 2% for the past 3 years. Single detach dwellings last recorded year of negative return on property value was in 1996 at a measly -1.9%. Since then, the past 17 years have enjoyed an average appreciation of 5.9% per year. Property values continue to increase which is great for people already holding investments here, and for those just starting out or looking to come to Guelph the acquisition cost is still very low compared to major markets like Toronto, Calgary, or Vancouver.
How did Guelph’s market perform in 2013?
In a nut shell, fantastic! It was the best year on record for resale volume with an increase of 8% over 2012. Values were all on the rise as well with single detach homes up 5.9%, semi-detach homes up 11%, and freehold townhomes up 6.7%. It’s a relatively strong Seller’s market, but there are still a lot of great deals here for investors. With such a strong student population, there is a consistent turnover of rental housing. Parents are buying and selling homes all the time for their kids to live in while they attend University. Now more than ever I am fielding questions from clients about accessory apartments and multi unit dwellings. It seems to me that as I tour the inventory of homes on a weekly basis, there are more and more houses coming up for sale with some type of rental accommodation.
What is the average home price in Guelph?
For 2013 a single detach home ended up at $377,103; a semi-detach would have cost you around $295,090; and a freehold townhouse $308,141.
What are the average rents in Guelph?
According to CMHC, the average rent in Guelph for a 2 bedroom apartment is $957 and a 3 bedroom apartment is $1099. When it comes to students, you can expect anywhere from $400 – $600 per room with shared accommodations. My experience with any type of tenant is that they will gladly pay a premium for a location with walk able amenities and easy access to transit.
What kind of property is the best buy in Guelph?
My recommendation to many of my clients is to stick with single or semi-detach. Current zoning by-laws only allow for these 2 types of dwellings to have an accessory apartment. I’m also not a big fan of condo fees, and many of the condo corporations further restrict an investors options with regards to tenant selection. That being said, a condo townhouse or apartment may suit a specific need. I’ve sold plenty of condos to parents that want to be completely hands off while their kids attend school. Condos have seen the some great results with regards to appreciation too, but the versatility of a freehold single and semi-detach provide the most flexibility to investors and that’s the main reason why it’s my first choice.
Why are more investors looking to buy properties in Guelph?
The market indicators are an easy draw for investors, but I really stress to my clients the importance of the diverse tenant profile Guelph has. We have a world renownd University with 20,000+ students, approximately 60% of which seek off-campus accommodations. Sitting on the East edge of the Tech Triangle that is Kitchener/Waterloo, Cambridge, and Guelph, and being only 100 km to Downtown Toronto with GO Train and bus service to the GTA, Guelph’s location makes it a prime commuter community as well.
What is your outlook for the Guelph market’s performance in 2014?
I see no reason at all for Guelph’s values not to keep climbing. With mortgage rules forcing first time buyers to come up with higher down payments, the need for rental accommodations are growing and good tenants are renting longer. Our population is expected to grow another 40+ thousand over the next 15-20 years. That coupled with a stable employment rate and aggressive business initiative from the city, I see Guelph continuing its strong and steady climb as a prime real estate investment hot bed going well beyond 2014.
Want to receive email updates of new listing the instant they hit the market? Click here: Homes for sale in Guelph
So, what’s your take on all this? Would you invest in the Guelph real estate market? Have you already, or are you planing too? Please post your thoughts and comments below and let me know what you think…