by Veronica Appia OurWindsor.Ca
A transformed way of thinking combined with the latest in technological advancements are key elements of the emerging real estate market trends for 2018.
According to the latest report by PwC Canada, the ideologies of buyers, investors and city planners are shifting in a myriad of ways.
In the institutional investment realm, high prices as well as a decline in the availability of commercial property in Canada is driving investors to turn to foreign real estate opportunities in search of better returns.These institutional investors are also increasingly interested in developing Class A properties both in Canada and overseas, which is inflating prices of commercial properties, while improving the return on investment.
Meanwhile, mid-sized investors looking to elevate their portfolios are expected to either redevelop or sell lower quality properties to attain properties of higher quality.
Real estate investment trusts are expected to take a bit of a hit however, and may have to cut down on payout levels or sell certain assets as a result.
When it comes to first-time home-buying mentalities, times are definitely changing – though many places in Canada remain fairly unaffected in terms of inflated housing prices. In Ontario, Toronto’s millennials have taken the hardest hit, with many first-time home buyers choosing to move out of the city, or to opt for condominiums over other types of housing. This means the condo markets in Toronto, as well as other major Canadian cities, are poised for growth in 2018.
Also, according to the 2016 Canadian census, 47.4 per cent of young adults in Toronto are living with their parents, compared to 34.7 per cent of young adults residing in Canada as a whole.
As well, the number of multi-generational homes and multi-family homes are expected to continue to rise in 2018, as affordable options for new families.
The development of new transit infrastructure in cities across the country will not only give these locations more investment appeal, but it will give Canadian home buyers more choices as well. They can move out of city centres, while still being able to commute to work, and elsewhere, in a suitable amount of time. Most recently, Toronto has seen a significant improvement in transit infrastructure through the Union-Pearson Express, the Toronto-to-York subway extension and the Eglinton Crosstown LRT.
In addition to these types of projects, the development of transit hubs, such as Vaughan’s Transit City and Mississauga’s M City, are becoming increasingly important in making cities more desirable for investors.
With self-driving cars projected to be on city roads in the near future, cities will eventually require less surface area for parking lots. That means there will be more opportunity for development as additional space opens up.
Nowadays, employers and employees want energy-efficient workplaces built with sustainable materials, and developers must deliver if they want their building to be desirable to tenants.
Markets to watch
In Ontario, Toronto and Ottawa make the list of PwC Canada’s markets to watch in 2018, with Toronto ranking second out of all cities in Canada and Ottawa ranking fourth.
Toronto is expected to see notable densification efforts over the next few years and its economy is expected to grow 2.5 per cent, while Ottawa is predicted to see more people being drawn to live in the city due to housing and lifestyle affordability, as well as the city’s investment in Ottawa’s LRT.