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Thinking About Real Estate? These Four Property Types Offer the Best Bet

11 August, 2017 / by Bryan Jaskolka

Investors, developers and property owners are all optimistic about Canadian real estate. Investors keen on venturing beyond the single-family housing market will find below, the four property types with the greatest growth potential.

The Canadian economy is showing signs of health, which means investors are looking at real estate as a potential growth opportunity. Although housing affordability has declined in recent years, there’s plenty of opportunity to invest in real estate. Below, we look at four promising investment opportunities beyond the residential housing market.

Industrial Property

In the current market, industrial property offers one of the most promising investment opportunities. The growth of online shopping has created higher demand for distribution and logistics centres capable of fulfilling orders. The consolidation of the retail industry is also driving demand for modern logistics. Demand for logistical support will grow as businesses look to streamline operations and create a single point of contact for their distribution.

As it becomes harder for developers to squeeze value out of residential developments, industrial property will become more attractive from the standpoint of investing. This means more potential for warehouses and transportation centres

Multi-Family Rentals

Rising home values and tighter lending guidelines have made homeownership out of reach for many families. Coupled with demographic shifts and aging rental properties, demand for purpose-built, multifamily rentals is on the rise. These are essentially single buildings that can house several families.

In fact, demand for rental property in large and mid-sized cities has been growing for several years. According to MacLean’s, Canada’s fastest-growing communities aren’t Vancouver or even Toronto. Instead, they are small to mid-sized cities in Alberta, Quebec and regions beyond the GTA.[1] As population growth continues, developers appear keen on getting new rental projects up and running.

Urban Mixed-Use Developments

As more and more people flock the big cities, the need for mixed-use properties combining residential, retail and offices will continue to grow. Canada’s major urban centres are seeing an influx of both millennials and boomers in search of convenience, opportunity and a more vibrant lifestyle.

With communities placing greater emphasis on building complete neighbourhoods, developers will likely move away from one-off projects to multi-purpose developments that meet the needs of the entire community.

Seniors’ Housing

Demographic trends clearly show that Canada’s population is aging. In 2016, seniors outnumbered children for the first time since Confederation.[2] These trends will not only impact pensions and healthcare, but demand for property as well.

Developers are placing greater emphasis on the wealthy boomer population. This segment will find greater use for retirement homes, long-term care facilities and senior housing. However, with nearly 6 million seniors living in Canada, it remains to be seen whether senior housing facilities can build to scale over the next two decades.

 

Canada’s real estate market extends far beyond single-family homes. Both demographic and economic trends tell us that demand for industrial property, rental units, urban developments and senior housing are on the rise. These four segments are expected to offer some of the most promising investment opportunities over the next three-to-five years.

Sources

[1] Mark Brown (June 30, 2017). “Canada’s Fastest Growing Cities 2017.” MacLean’s.

[2] Eric Grenier (May 3, 2017). “Canadian seniors now outnumber children for 1st time, 2016 census shows.” CBC News.

          

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