The key to the Waterloo market is to evaluate its “student” housing market as much more than just homes for students, according to Matt Elkind of the Condo Store.
“We’re thinking less in terms of student housing and more about the market overall; the typical student stays in a house for three years but we’re finding people are staying longer, getting jobs, and choosing to live in the city,” Elkind told CREW. “We call it student housing because the units are close to the universities but Technology Park is close by as well.
The buzzword is student housing but that’s not what it’s all about.”
Billed as the Silicon Valley of the North, companies such as Microsoft, Google and other tech start-ups and incubators are choosing to set up shop in the ‘Loo. That’s due in part to attractive real estate prices.
“Commercial property goes for about $15 per square foot as opposed to $45 per square foot in Toronto neighbourhoods such as Liberty Village,” Elkind said. “(Waterloo) has a very powerful long-term growth story and it’s only one hour from Toronto.”
And the city is certainly booming, with 500 active start-ups in 2014, according to Canada’s Technology Triangle. It’s also home to 1,000 tech firms.
Despite the boom -- and its world-class universities --, a recent report argued student housing is overbuilt by 27%. However, Elkind argues it’s a certain type of home that has been overbuilt.
“The problem is there is an oversupply of a certain type of unit we wouldn’t touch – five bedroom units,” Elkind said. “One or two bedroom units (are a good investment); wealthier students and graduate students who want to live alone are attracted to these.”
Further, Elkind says a lot of students choose to stay long-term in Waterloo once they’ve finished their schooling.
“That report also ignores the fact that 20% of students will stay in Waterloo.”
Meaning an investor’s “student” house may become more than just a frat pad.
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This is why Waterloo’s student market is a good buy, despite reports to the contrary.