It is easy to see why property owners, Investors, developers are cautiously optimistic about the Canadian real estate market right now. While some parts of the country face certain unique challenges, the Vancouver and Toronto markets continue to experience an increased demand brought by lack of supply.
Although this has raised prices, and led to affordability concerns, the underlying message is that markets in each region present valuable opportunities for smart investors and developers. That is provided they embrace technology and correctly predict the needs of future buyers.
An economic viewpoint
Canada’s economic performance seems to have bounced back from a weak stint since 2015. The country’s economy continues to readjust itself in the wake of declining oil and other commodity prices. According to Conference Board of Canada’s Metropolitan Outlook 1 Spring 2016, the country’s GDP is expected to increase by 2.3% in 2017 and stay above 2% till 2021.
As Richard Morrison of Turbo Tap says, “While there are regional differences in the outlook for various types of property, developers, property-owners and investors are optimistic about the coming months.”
The following are some top places to buy:
Edmonton
Most people who’ve only read or heard about Edmonton think the city’s main attraction is the big West Ed Mall, but those who’d been or lived there will tell you there’s so much more from the “the blue collar city.”
Much of the wealth of Edmonton --- considered Alberta’s cultural, administrative and educational hub (the city is home to the University of Alberta (UofA)) --- owes to the trades people who work in the oil sands.
Edmonton is famously nicknamed “Canada’s Festival City,” largely because of its vast number of carnivals and thriving art scene with 82nd Avenue (around Whyte Avenue) the main hub.
People who’ve made a home or work in the city know that access to Anthony Henday Drive is the key to a good quality life, as the ring road links easily to all corners of this fast emerging Albertan city.
A lot has however changed in the last 15 years, since construction on this road first started as neighbouring communities to the Henday Drive, such as Montrose and Newton, continue to see rapid growths and expansions. Developers are refocusing attention to these city corridors but buyers could still get an older bungalow for about $275,000.
Guelph (Ontario)
Guelph has established itself on top of the list as the city with the most attractive opportunities for real estate investors in Canada according to Moneysense’s 2017 “Buy Now” ranking. This means it has knocked Thunder Bay from its 2-year stay on that pedestal (now down to 4th position).
Over the past few weeks, government experts, economists and bank CEOs have expressed some concern about the ongoings in the property sector. In a recent report, it was revealed that the price of homes in Toronto had risen by 33%. The city’s housing market shows no signs of cooling as the price of a standard detached home in the city soared from C$1.6 Million to C$2 Million.
No market is totally devoid of issues, but some are in a better position to buffer a market downturn. One such place is Guelph.
At the moment, homes in Guelph cost C$441,000, which is about 4 times the average household income. In comparison to markets like Saint John, Moncton or Thunder Bay, this city in Southwest Ontario is not exactly cheap, but when compared to Toronto, it can be regarded as affordable.
Durham (Ontario)
In spite of the predicted drop in some sales activity, Ontario’s housing markets won’t see price declines anytime soon. This is especially true for properties in the Greater Toronto Area and in the larger Ontario region called the Golden Horseshoe. This is mainly as a result of a persistent lack of supply of housing stock, especially for low-density, single-household detached homes.
The lack of supply indicates that sellers are sitting comfortably in a heated seller’s market. Figures are measured by the months of inventory ratio. The common rule is that an inventory ratio under four months (120 days) is strong seller terrain.
The lack of inventory has affected the price of housing in the last 12 months. As a result, property owners or investors looking to sell a home in Durham and surrounding areas can expect strong demand. The average price of a home in Durham is C$527, 285, which is nearly 5 times the average household income. The 5-year annual ROI average is 10.9%.
Burnaby and Burquitlam (Vancouver)
According to MLA Advisory, a property intelligence group, an estimated 4,500 new presale condominium units will be launched in Metro Vancouver between April and June. Almost half of the new condos will be located in Burnaby and Burquitlam. According to MLA, these areas will be the busiest for concrete condo sales in Western Canada, 2017.
If you are in the market for presale condos, these areas should pique your interest. Downtown Vancouver also shows promise as a top buy location this quarter with the forthcoming 1,000 luxury units to be unveiled later this year.
Real estate properties are also selling out fast in this area. For example, Wexley and Belmont at Heritage are said to be quick approaching sell out. It is estimated that more than 35 new high-rise buildings will be launched this year in Metro Vancouver, as well as 10,700 new concrete units.
Economic growth
According to PWC, Vancouver is expected to top all cities in Canada with a GDP growth of 3.3%, driven by strong gains in employment and housing statistics. It isn’t known yet how British Columbia government’s increased property tax for foreign investors will impact the Vancouver market in the long term.
Millennials are also driving up the city’s rental market. They are looking for new, better-quality units near good facilities and close to public transit.
Following closely behind Vancouver in terms of top growth is Saskatoon, with a forecasted 3% GDP.
By James Cummings
