"The strength of the sector will be fuelled by strong demand drivers and constrained supply characteristics," reads the study by Morguard Corp., a publicly traded property management firm. "Negligible new construction will also act as a booster of generally tight conditions in the rental market."
The forecast anticipates occupancy rates hovering close to the 98.0% mark nationally, with rents will continuing to rise,although capped to some degree rental control legislation.
"The multi-family residential rental sector will see largely stable and healthy performances in the coming year, as was the case through all of 2012," Morguard continues. "Steady growth in property values over the past few years may ease in 2013, however values will continue to range at the peak."
That analysis jives with that of other market watchers, who point to inmigration and scarcity of product for the bullishness in the marketplace.
Uncertainty around alternative investments -- stocks, bonds, etc -- is also driving demand for multi, although new-build construction is still a daunting propostion for many smaller investors fearful of losting a cap rate advantage.
Other key projections from Morguard include:
- Property values will continue to range at the cycle peak supported by robust investment demand, low interest rates, and historically low long-term bond yields
- Income performance strength will remain a fixture over the near term as rental markets in all sectors post strong occupancy characteristics, positive demand trends, and modest increases in rental rates
- Robust purchasing activity in the investment sector will continue to feature a significant REIT sector component, however pension funds and private capital will remain active
- Conservative construction volume in the office and industrial sectors over 2013 will ensure rental market conditions improve however, as 2013 ends risk levels will rise with the increase in office development in Vancouver, Toronto and Calgary
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