Pre-construction in Kitchener/Waterloo

[Terell Brown]

Hi all,
I currently invest in rental properties in Birmingham, Alabama. Birmingham is very steady market so I strictly invest for cashflow. I'm looking to add an appreciation play into my portfolio and I believe my competitive advantage is in Kitchener/Waterloo where I did my undergrad. Not to mention the USD to CAD conversion.

I'm strongly considering investing in a pre-construction condo or town home in the area. Ideally, the property will be complete in 2-4 years at which I'll just sound the contract and collect whatever appreciation occurred over that time. I don't plan on ever holding or mortgaging the property especially since it won't cashflow.

In my this sounds like a pretty straightforward play given the steady growth of the area's tech sector which I believe will actually be accelerated given a lot of tech companies are looking to open satelite offices in Canada due to the encouraging adoption of remote work, cheaper and abundant tech talent and uncertainty of american immigration causing a lot talent to move to Canada.

The biggest risk I see is whether or not the specific property I buy will be in demand in 3 years:

Who are the demographics that will actually be buying homes… not the 22-24 year old coming out of school and working at a tech companies but perhaps the late 20s to 30s folks who are settling with a partner and kids. Would they want a 1 bedroom condo with no parking? Maybe instead they'll want a 2-3 bedroom townhouse with a garage that is just outside the downtown core with a lot more space but still a short commute to work? Maybe people in this demographic actually just want to rent?

So my question is to folks that are familiar with the market, what demographic of people are buying in high amounts? What are they looking for? Are most folks looking to rent because I'll be looking to sell and don't want to get stuck holding.

Also any thought in general about pre-construction in Kitchener/Waterloo? Have you made a similar investment? Is it too speculative?

I'm specifically looking at Spur Line Commons (Phase 2) by Reid's Heritage Homes or perhaps Web Oaks Urban Towns

Thanks!

Terell