8 March 2016

One of the things that makes the Guelph student investment market truly unique is that every January and February there is a feeding frenzy of fury and excitement as parents eagerly try to purchase a home for their son or daughter to attend the University of Guelph the following school year. However, once January and February are gone, the market drastically drops off only to be awoken again the following year. 

Of course, some student homes are bought and sold all throughout the year. Straight investors are always looking for a good buy for investment and if there are leases in place, anytime of the year usually works for them. 

For the purposes of this article though, I wanted to focus my attention on the bulk of the student season when mostly parents are shopping for their children and I thought it would be interesting to take a look at what happened this January and February and compare it to what happened last year during the same time. 

I completed a search of all detached, semi-detached and townhomes sold for under $400,000 in the Old University, Kortright East and Kortright West areas. I realize this does not account for any student homes purchased outside of these areas and that some of these homes sold within my search may not have necessarily been used for students. Despite my inability to independently verify whether or not each and every one of these homes was purchased for student purposes, I believe it’s a fair assumption to assume that most of them were. I also excluded the complexes in my townhome search that are known to fully discriminate against students living there to keep the townhome results a more accurate reflection of the true student market. 

An interesting trend can be seen with the semi-detached sales from this year versus last year. Sales volume was up by 200% and the average for days on market (DOM) was down to 15 days from 22 the year before, meaning these homes sold over 30% faster this year compared to last. It is worth pointing out there were small numbers to work with, 3 homes selling last year and 9 homes this year, however it would still seem this year, semi’s were in higher demand. Ironically enough, they appreciated the least amount compared to detached homes and town’s, not even hitting a 3% average sales price increase from last year. Strangely, all 9 of these semi’s were located on only two streets within the areas I searched – Mason Court and Cole Road. 

Detached homes performed as to be expected, reeling in a 4.17% average sales price increase. There were also 10 less units sold this year compared to last, raising my suspicion that this years buyers were more attracted to the semi’s that cost approximately $65,000 less than their fully-detached counterparts.   

Now, the townhomes are another story. Although my figures suggest an average sales price increase of 9.69% this year, I believe my numbers were skewed by the fact in 2015 many more of the older units with higher condo fees, such as the ones on Scottsdale and Janefield, were sold compared to this year. These units are generally around the $250,000 mark or less and not as many were sold in 2016, whereas there were more units like the ones at 1055 and 1155 Gordon sold, which are now around the $340,000 mark. Regardless, of how this trend may have artificially boosted the overall average sales price increase for townhomes in these areas, I still believe these numbers speak for themselves and that townhomes will remain one of the most popular choices for U of G students, and parents alike, for many years to come. 

All in all it was a great student season this year and many proud parents were able to find desirable and loving homes for their son or daughter to attend the University of Guelph. On the flip side of the coin, just as many parents were able to dispose of what was likely a profitable investment for them, which only further solidifies my belief that buying into the student rental market in Guelph is still a solid investment. 

Until next time, Happy Investing!

Kyle Woods

REALTOR®

226.314.1600

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