Emerging Trends in Real Estate 2016
, jointly published by PwC Canada and the Urban Land Institute today, says that the rise of permanent renters is making way for a new demographic in many Canadian housing markets, especially as a growing proportion of the population struggles to come up with sufficient down payment on a home of their dreams.
“Given the cost of housing, where affordability is still an issue, one of the big trends is the increase in renters, but by choice” says Frank Magliocco, national real estate practice leader, PwC Canada. “Not only the young millennials, but also some in the older generations, are looking to move in and rent rather than buy homes.”
The report also highlights that the Canadian real estate market is in a period of transition, but one that will open up a series of new investor opportunities, particularly in warehousing, transportation, manufacturing and other commercial sectors across the country.
“Despite slower economic growth, opportunities in the Canadian real estate market abound but they are changing,” says Magliocco. “Investments that have traditionally been sought after are shifting in favour of safer, more stable market sectors.”
Foreign investment will continue to be a trend to watch in 2016, as Canada retains its allure as a safe haven for capital, and the lower Canadian dollar heightens investor interest. While foreign buyers will continue to invest in hot markets, such as Toronto and Vancouver, there will also be more interest in Montreal and Saskatoon, the report says, where interest in farmland and development land is rising.
While last year’s report heralded the trend of urbanization, this year’s report dismisses suggestions that the suburbs are in decline. Suburbs around the Greater Toronto Area, for instance, are becoming more expensive due to government policies, influx of immigration and higher demand. But, in terms of commercial real estate, developers interviewed for the report have acknowledged that the suburbs need more services, better tax incentives, and lower operating costs to compete with the downtown core.
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Renting is no longer seen as a temporary step on the road to homeownership but as a long-term alternative, according to a new report.