What You’d Need to Save to Buy a Home in Kitchener-Waterloo on a Median Income

The Kitchener-Waterloo region has steadily become one of the hottest housing markets in Ontario’s Greater Golden Horseshoe. Strong local job creation and business investment in the region’s tech, education, and healthcare industries have drawn increasingly large numbers of buyers to its cities, who are also piqued by their comparably affordable housing stock.

However, as levels of migration to KW strengthen, the supply of available homes for sale has become increasingly scarce. That’s pushed the region into a strong sellers’ market, as buyers face increased competition and upward pressure on home prices. 

According to the November report from the Kitchener-Waterloo Association of Realtors, home sales have trended 4% higher than 2018 levels over the past six months, while new listings plunged by 27.9% in November, with overall months of inventory sitting at a historic low of 1.1. As a result, prices have seen considerable gains across all home types: the average detached home rose 14.2% to $660,071, condos by 13% to $342,561, and townhouses and semi-detached homes up 22.4% to $443,633.

How Affordable is Kitchener-Waterloo Real Estate?

While these price points still make KW a considerably cheaper option than the Greater Toronto Area, where the average home fetches $843,637, how affordable has its cities remained for middle-income home buyers?

To find out, Zoocasa analyzed maximum mortgage qualifications in neighbourhoods across both Kitchener and Waterloo to determine how much home financing a median-income household would qualify for. The study compared those amounts to the median-priced property in each, and determined how much of a cash down payment the buyer would need to make to cover the amount not paid for by the mortgage. It also calculated the number of years it would take for households to save these required down payments, assuming they set aside 20% of their incomes annually. Mortgage amounts were based on the “stress test” rate of 5.19%, a 25-year amortization, 1% of the property’s value as property tax, and a $100 monthly heating bill.

Waterloo: 3 of 13 Markets Within Reach for Median-Income Households

According to the study, there are a total of three neighbourhoods within the  Waterloo real estate market where a median-income household earning $83,045 would qualify for a large enough mortgage to save for a down payment and purchase a home within a five-year timeline, as the median home price in each remains below $450,000. These areas are Beechwood / University, with a price of $400,000 and a 1.9-year timeline, Glenridge / Lincoln Heights ($412,625 and 2.6 years), and Uptown Waterloo / North Ward ($440,000, 4.4 years). In contrast, such a buyer would need to save for 9.4 years to purchase a home priced at the City of Waterloo overall median of $521,500.

In Waterloo’s most expensive markets, however, median-income buyers would face savings timelines of nearly two decades; in Colonial Acres / East Bridge, Columbia Forest / Clair Hills, and Erbsville – Laurelwood, where home prices range between $635,000 – $650,000.

Check out the infographic below to see how affordability varies for median-income households across the City of Waterloo:

Just 2 Markets Within Reach for Median-Income Buyers in Kitchener

Affordability is similar for Kitchener homes for sale in entry-level neighbourhoods, though choices are limited to just two markets for median-income buyers looking to purchase within five years: Chicopee / Freeport and Downtown Kitchener / West Ward, where median prices hover below $370,000 and boast savings timelines of 1.7 and 4.2 years, respectively. However, the neighbourhood of Victoria Hills – with a median home price of $390,000 – could also be an option for those willing to save for 5.5 years for a down payment.

However, in Kitchener’s priciest neighbourhoods, the affordability gap is much more acute than found in Waterloo, with saving timelines ranging over 20 years (in Idlewood / Lackner Hills and Trussler, where homes cost $580,000 and $635,450, respectively), and a whopping 63.6 years in Hidden Valley / Pioneer Tower, where a median-priced home goes for $1,115,000.

Check out the infographic below to see how affordability varies for median-income households across the City of Kitchener:


Median home prices were sourced from the Kitchener-Waterloo Association of REALTORS for the period of January to November 2019. Data was retrieved on Dec 11, 2019.

The median total household income for the City of Waterloo was sourced from Statistics Canada. The maximum mortgage affordability is based on buying the median-priced home on the median income, the mortgage “stress test” rate of 5.19%, a 25-year amortization, and carrying costs of 1% in property taxes and $100/month for heating.

Calculations were made using the Ratehub mortgage calculator: https://www.ratehub.ca/mortgage-affordability-calculator.

The minimum down payment required is the difference between the home price and the maximum mortgage available if the down payment was 20% or more of the home price. If the minimum down payment is under 20%, the max mortgage amount includes the mortgage insurance premium.

About Zoocasa

Zoocasa is a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings at zoocasa.com or download our free iOS app.

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About Penelope Graham

Penelope Graham is the Managing Editor at Zoocasa, and has over a decade of experience covering real estate, mortgage, and personal finance topics. Her commentary on the housing market is frequently featured on both national and local media outlets including BNN Bloomberg, CBC, The Toronto Star, National Post, and The Huffington Post. When not keeping an eye on Toronto's hot housing market, she can be found brunching in one of the city's many vibrant neighbourhoods, travelling abroad, or in the dance studio.