It is impossible to consistently and accurately predict what turns and developments any given market may experience. However, there is value in determining which trends will likely influence a market in the coming years. When it comes to the Canadian real estate market, there are a few notable trends that will impact profitability and success for real estate investors and developers moving forward.
The rental industry continues to boom, but a new alternative to traditional renters is coming into focus. Co-living, in which landlords rent out rooms instead of entire apartments, is becoming popular for the owners of rental properties as well as prospective renters. For landlords who have struggled to fill or profit from units, this practice allows for a higher pool of potential income and renters. On the other side, renters will have options when it comes to choosing a residence, as the rent will be lower for a room than for the apartment as a whole.
Home Sales & Prices
Since 2016, home sales have continually declined, but in some areas, like Ontario and British Columbia, an increase of disposable income is projected to boost the market, promoting a higher rate of home sales. In the same vein, home prices are expected to continue rising due to the increasing demand. Still, this development will likely be prominent only in major provinces like those mentioned above.
For those looking to build new properties, climate change now presents additional challenges as well as costs. Securing proper permits and including approved materials add additional costs to the typical construction costs and also often increase the time needed to finish a project. While the initial cost of constructing new properties has certainly risen, the good news is that including sustainable features and taking the additional steps to get properties approved tends to have a good ROI for investors.
Agents & Digital Platforms
With an increasing number of digital platforms that make the house-hunting process more accessible, fewer people are turning to real estate agents to facilitate the process. More individuals are beginning to trust the information that they can access on their own. For investors, however, it is still productive and beneficial to consult with an agent; after all, paying their fees is often more profitable than investing thousands or millions into a property that is not suitable for an investor’s needs.