Micro condos are set to be real estate’s next big thing
This year may come to be known as “the year the micro condo really took off.” With more single people wanting homes and higher prices making some of our cities unaffordable for single income and low income households, small may prove to be a beautiful solution. Demand is being driven by investors who see an opportunity to add the small but perfectly formed homes onto the rental market, targeted at young professionals who spend most of their lives at work or socialising and are happy to come home to 500 square feet of living space. Shaun Hildebrand of Urbanation told The Huffington Post
that the return on investment is often better for micro condos than the rest of the market with rents of $3 per square foot rather than around $2.60. He said that, while the potential for a micro-condo boom will be watched closely, it won’t become a reality until the units are more widely available: “Sometimes we don't know how strong demand is until we're shown the supply." Mortgages are not easy to secure for small units currently which may limit the growth of the sector to cash buyers, however those with equity in other properties may be tempted into the market. Read the full story.
Alberta to avoid recession, says RBC
Fears that the oil industry’s decline would drag Alberta into recession are not shared by the Royal Bank of Canada. A report by senior economist Robert Hogue stated tha,t although there is likely to be a dramatic slow down for the province, there will still be growth. That growth, however, will be sharply lower than the RBC prediction made in December when it expected GDP to grow by 2.7 per cent, down from the 4.1 per cent of 2014. This latest report suggests an even slower 0.6 per cent growth for 2015. Hogue says the cut in capital investment by the oil industry will impact employment, consumer spending, migration and the housing market. While confidence may be the issue for real estate in Alberta now it will be lower population growth that is the bigger factor, Hogue’s report predicts. He sees home resales declining by 16 per cent this year with housing starts down to 27,500 from last year’s 40,600. There is more optimism on prices though with the report suggesting a drop of just 0.5 per cent across the province. Read the full story.
Confidence at lowest in almost two years
Consumer optimism for the economy has hit its lowest point since May 2013, according to the Bloomberg Nanos Canadian Confidence Index. For last week, the index fell to 54.57; the 12-month high is 60.60. Sentiment is lowest in Atlantic Canada and highest in Ontario. The sub indexes on personal finances, job security and the overall economy were all lower, however the real estate index rose slightly meaning that more people expect house prices to be higher in six months.
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