“Cities all across North America have started to respect urban boundaries,” said Bruce Firestone, an Ottawa
-based investor and Realtor. “This drives home prices up and it leads to a shortage of good-quality products for investors.”
While this is a newer phenomenon for Canadians, it is long-standing in other global urban cities. For instance, a researcher at the London School of Economics recently wrote that the greenbelt around London is at least partly to blame for skyrocketing home prices in the capital, especially when these are compared to other European cities with similar densities.
In Canada, the greenbelt around the Greater Toronto Area
is creating challenges for both investors and for builders. It may be raising house prices, but that is only beneficial to those who are already invested in the market.
Instead, developers will gradually find they are running out of space. Nick Karadzas, a co-founder at Rock Star Real Estate, said: “If you look at the map of the greenbelt, some building is coming close to running up against it already.
“For that reason alone, it is going to make development more difficult and limit supply, which is good for overall housing prices.”
It is likely that this will lead to the introduction of more and more multi-family buildings, such as low-rise and high-rise condos, to compensate for the lack of space by building up.
“The one thing you will see there is the introduction of more high-density units,” added Karadzas. “That started [in Burlington
] a number of years ago and that’s continuing and probably even ramping up further as developers realize that there is just going to be less land available. As prices rise, they have to create more affordable units.”
Bruce Firestone is the keynote speaker at CREW’s InvestorForum, which will be held March 28 and 29 at The International Centre in Toronto.
Look out for the February/March issue of CREW to find out more about how the Greenbelt is impacting investors in Burlington.
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A growth in land shortages, as expanding Canadian housing markets bump up against the country’s green spaces, is having an impact on the property market and opportunities for investors, say experts.