Experts have indicated Canada will need to build millions more homes in the next 10 years to meet our growing needs. To the casual observer the problem is easy to solve: just build more homes. For those in the real estate development field, the problem is much more complicated than this.
Investment volumes in the Greater Toronto Area’s commercial real estate market decreased year-over-year in Q3-2020, but, along with Montreal, the region remains investors’ Canadian market of choice, according to report from Altus Group.
Through the first three quarters of the year, $11.9 billion was invested in the GTA, a 23% decrease from the same period in 2019; the $4 billion invested in the country’s most populous metropolitan region last quarter also marked a 23% decline from Q3-2019. The report noted that, at $1.1 billion, the land sector—comprised of the industrial, commercial and investment sector, as well as residential land and lots—was the only one to surpass the billion-dollar mark in the third quarter, with $665 million coming from the industrial space. This was followed by the apartments sector at $575 million.
Among the most significant transactions during the quarter, according to Altus Group’s report, were Signet Realty’s sale of seven multi-residential assets to Starlight Investments and Timbercreek Asset Management—the former acquired 386 units for $113 million and the latter received 289 units for $80 million.
Additionally, 277 Wellington St. W. was acquired by Reserve Properties and Westdale Properties through a joint venture, and at $78.5 million, the nine-storey 100,000 square foot building is considered by Altus to be the largest office transaction in the GTA during Q3-2020. The group also believes the site could be a lucrative infill site in the next few years.
The report mentioned that the retail and office sectors had difficult third quarters because of the COVID-19 pandemic, opening the door for greater sums of investment in the GTA’s industrial and multi-residential sectors, which have both withstood underwhelming market conditions rather well. Moreover, while the pandemic has catalysed a lot of turmoil in the market, it’s also the reason interest rates have fallen to all-time lows, which investors are leveraging with abandon.
While there has been a deceleration in new home sales, we must keep the pedal to the metal and continue to train skilled trades workers for the future.
Many jurisdictions in the U.S. have been thinking outside the box to boost the housing supply. Here in Ontario, we’d be wise to follow suit.
This free summit will feature top experts in Canadian real estate who will share their knowledge on a broad range of topics. It will be presented on Sat. Jun. 18th from 12pm-3pm.
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