We’ve seen enormous appreciation is real estate over the past decade, driven in part by record low lending costs. But a substantial shift in rate policy in early 2022 put a damper on market activity bringing falling real estate prices for the majority of 2022.
Since then home prices have stabilized and remained mostly flat, so what do you need to earn right now to purchase real estate in Kitchener Waterloo?
Here’s a breakdown of just how much a typical buyer needs to earn to purchase property in Kitchener Waterloo in the spring of 2025. I used a 5 year fixed term 25 year amortization mortgage with a stress test rate of 5.64%. The down-payment was set at 10%. Check out my financing page for more details on this stuff.
FYI, a 5% down-payment is only allowed on purchases under $500k. Purchases between $500k and one million require 5% down on the first 500k and 10% on any additional amounts up to a million dollars. Any property over $1,000,000 needs a minimum 20% down.
Here are the calculations for semis, towns, apt. style condos and detached properties using May 2025 data. Just so you know, I included 1/2 month’s condo fees for the apt. style condo as that is normal practice. I’m assuming no debt aside from the mortgage and use a gross debt service (GDS) ratio of 35% which is the typical max % that lenders will allow.
Kitchener Waterloo apt. style condos
They’re averaging $413,000 this May here in KW. Lenders need your heat, taxes, mortgage and 1/2 your condo fees to be no more than 35% of your gross income.
Assume monthly property taxes of $225, heat @ $75 and 1/2 condo fees of $200. Using the above criteria, a mortgage of $371,700 has a monthly payment of $2291.21
$2291 + $225 + $75 + $200 = $2791 Gross Debt Service per month.
With a GDS ratio of 35% we multiply $2791 x 100/35 to get the required monthly income.
7974 x 12 = $95,691 yearly household income, down from $116k a year ago
Kitchener Waterloo semis
For semis in KW the average for May was $645,000. Let’s say $250 for taxes and $100 for heat. Freehold, no condo fees. A $580,500 mortgage has monthly payments of $3590
$3590 + $250 + $100 = $3940 Gross Debt Service per month.
With a GDS ratio of 35% we multiply $3940 x 100/35 to get the required monthly income.
$11,257 x 12 = $135,085 yearly household income. This is down from $147k required income for the combined average price of semis and towns last year.
Kitchener Waterloo towns
For towns in KW, May 2025 prices are averaging $605,000. Let’s say $250 for taxes and $100 for heat. Freehold, no condo fees. A $544,500 mortgage has monthly payments of $3,368
$3368 + $250 + $100 = $3718 Gross Debt Service per month.
With a GDS ratio of 35% we multiply $3718 x 100/35 to get the required monthly income.
$10,622 x 12 = $127,474 yearly household income. This is down from $147k required income for the combined average price of semis and towns last year.
Kitchener Waterloo detached
The average May 2025 price for a detached home in KW was $951,000. Let’s use $375 for taxes and $100 for heat. Again, a 25 year fixed rate mortgage with a stress test rate of 5.64% and 10% down = mort payment of $5,294
$5,294 + $375 + $100 = $5769 Gross Debt Service per month.
With a GDS ratio of 35% we multiply $5769 x 100/35 to get the required monthly income.
$16,482 x 12 = $197,794 yearly household income, down from $213k required last spring.
There’s no question these are some very steep numbers, but affordability has improved considerably in every segment compared to my spring 2024 version of this post. The best, apartment style condos are 18% more affordable, with detached requiring 7% less income even in the face of a higher average purchase price.
Prices are less of an issue for those who are already on the property ladder but value can still be found in our market. Overall, this spring has been particularly quiet, with the usual spring market bump in prices completely absent. Inventories are up considerably.
As well, Kitchener and Cambridge tend to be cheaper than Waterloo more often than not. Prices span a wide range in every segment, with detached starter homes available in the high sixes and low sevens throughout the region. Buying at off-peak times can help too, with properties often selling at a discount during the dog days of summer, or deep in the winter.
