Investing in rental apartments in Canada’s biggest cities may be a smart thing to do right now.
At least that’s what Sun Life Financial’s real estate investment business Bentall Kennedy sees as a good strategy. It plans to increase its multi-residential investments to 15% of its portfolio, from currently less than 10%.
Although there are signs that the economy has peaked, Bentall Kennedy’s head of strategy and resrach Doug Poutasse told Bloomberg that things are still in a good place right now and there’s another key factor in focus.
“The thing that we’re tracking, that’s the most positive, is the immigration population growth — it’s really accelerating,” Poutasse said.
Immigration is growing fast and Poutasse says that rents are growing well, although maybe a little too well.
“As a landlord, we like strongly, but for people, six, seven and eight per cent rent increases are very difficult,” he said.
Poutasse added that regulatory and construction cost burdens have impacted the condo sales market and led to cancellations and a shift to building high-end towers.
He believes that there is a growing opportunity in the rental apartments space due to the rising cost of condos.
Steve Randall has more than three decades of media experience encompassing online, newspapers, magazines, radio, and podcasts. He focuses on insights and news for professionals in finance, real estate, and legal services. Steve writes for multiple Key Media titles in Canada, United States, Australia, and New Zealand.
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