In 2022, the Kingston real estate market saw a lot of “move-over” activity, with Kingston residents moving further out into more rural regions and out-of-towners leaving larger urban centers in favor of Kingston’s lower price point. Move-up buyers are expected to continue driving the market forward in 2022, with the majority of them looking for two-story detached homes, which are the most common building type in the area.
Because of ongoing challenges in housing supply, rising demand, and rising prices, the Kingston real estate market is expected to be another seller’s market in 2022. Low inventory has been a common trend in many Ontario housing markets, pushing up prices.
If you’re looking for certainty, real estate may not be the best bet for you; however, given the current market conditions, Kingston is trending into all-time high territory. While everyone interprets data differently, some will say, “never buy high – wait for the dip,” while others will say, “ride the elevator to the top and let the equity rise.” It is up to you how you cherry-pick data to back up your own feelings on the matter, but there is something to be said about Kingston’s almost recession-proof economy.
Apart from post-secondary education, Kingston is heavily influenced by government-funded jobs in military and correctional facilities. If one thing is consistent, it is that when the government has to make cuts in certain departments, corrections, military, and policing never seem to be among them. With the average correctional worker earning well over $100,000 per year and having almost limitless job security, it’s easy to see why the Kingston housing market continues to grow and be consistent.
Key Things You Should Consider
Buy and Hold
The buy and hold strategy entails purchasing an asset and holding it for an extended period of time. Their profit calculation includes renting out that investment property while keeping it to increase their returns.
When the asset’s value has increased in the future, the real estate investor has the option of liquidating it if it is in their best interests.
Long Term Rental
BRRRR is a long-term investment strategy that includes buying a house, Repairing it, Renting it, Refinancing it, and Repeating the process with the money from the mortgage refinance. When it comes to increasing your investments, the BRRRR is a great tool to use. This strategy is dependent on your ability to extract cash when refinancing.
When you finish renovating the rental, the value must be greater than your total purchase and rehab costs. Then you take a cash-out mortgage refinance loan based on the higher value and pocket the difference. This money is then invested in the next investment asset, and so on. This enables you to steadily increase your assets and investment revenue.
Fix and Flip
A fix and flip investor is someone who buys a house for less than market value, fixes it up so that it becomes more valuable, and then sells the house for a profit. Your home improvement budget must be precise, and you must be able to purchase the home for less than the market value.
It is critical that you are aware of what houses are selling for in the market. The Days on Market (DOM) data should always be used to determine how long it takes for homes to sell. Selling the property quickly will help you keep your expenses low and your returns secure.
Wholesaling
As a real estate wholesaler, you sign a contract to purchase a residential property that other real estate investors may be interested in. An investor will bid on the sale and then purchase the agreement for you. Instead of selling to a wholesaler, the seller sells the property under contract to an investor. You are selling the rights to the purchase contract rather than the actual property.
Why Kingston?
It has some of the best restaurants in the province, cultural diversity, many historic sites, and it is a beautiful, clean, and well-developed city. With only a 2-hour drive from the big city, and less than that for a drive into Ottawa – the nation’s capital – it has the most pull for new property seekers, with low vacancy rates, great cash-flowing rentals, and cheap housing (compared to Toronto). Furthermore, with easy commutes – 1 hour north into cottage country or 45 minutes south into the United States – Kingston is not far from anything.
Kingston’s median home value is $346,400, compared to the statewide median of $311,700 and the national median market value of $204,900.
Over the last ten years, the annual growth rate of home values in Kingston has averaged 0.3%. Over that time period, the average annual appreciation rate in the state was 0.14%. The national annual home value appreciation rate is 0.13% during that cycle.
In terms of affordable houses for rent in Kingston, Kingston has a median gross rent of $1,485. The median gross rent in the state is $1,194, while the national median gross rent is $1,023.
Kingston has a home ownership rate of 57.6 %. Homeownership accounts for 62.7% of the total population in the state and 63.8% of the total population nationally. The percentage of homes occupied by tenants in Kingston is 42.4%. The statewide occupancy rate for renters is 37.3 %. The rate of occupied residential units in the country as a whole is 36.2 %. In Kingston, the rate of occupied houses and apartments is 89.77 %, while the rate of unoccupied single-family and apartment buildings is 10.23 %.
Bottomline:
Is now a good time to purchase a home in Kingston? Yes, the answer is YES. It will most likely remain a great place to buy for the foreseeable future, but buying sooner will give you more room for equity growth as the bubble begins to rise.
