Looking ahead at 2015: Demographics driving development
Canadian homebuyers are forgoing the larger lots and extra bedrooms of the suburbs in favour of urban conveniences close to home, according to a recent report titled Emerging Trends in Real Estate 2015 released by PwC and Urban Land Institute (ULI). Urbanization is no longer a growing trend, but rather the “new normal.” Hot on the heels of these city-bound homebuyers are developers, keen to meet buyer demand and add value to their properties by exploring new mixed use developments like condos and rental apartments which combine residential and commercial opportunities.
“In the Canadian market, the bidding on prime properties can be quite competitive. In response to this competition, the market has become very creative in finding ways to enhance value. The convergence of residential and commercial development is a way to illustrate this value,” says Frank Magliocco, national leader, Canadian Real Estate, PwC. “Residential developers have started to add retail and other services such as health care and education in a bid to attract buyers. Likewise, commercial developers are including residential components to their office and retail projects.”
Canadian real estate at a glance Where are the best places to be in 2015?
Calgary and Edmonton have been named Canada’s top real estate markets, scoring well for investment, development and housing.
Toronto came in third, with continuing migration by residents and retailers to the city core, and an already strong condo market further solidified by a lack of affordable housing.
Following closely in fourth, Vancouver is expected to lead in growth in 2015, with steady foreign investment pouring into its robust housing sector.
Montreal’s stable market is expected to remain so in 2015, with a drop in the condo market as it continues to absorb inventory. “Meanwhile, the city is keen to attract high-end retailers via Rue Ste. Catherine, where experts foresee the avenue being transformed over the next five years,” according to the report.
A drop in Winnipeg home sales has raised concerns around overbuilding impacting the city’s finances.
“The real estate industry of Canada’s large urban centres continues to be an engine of stable economic growth for the country. It has proven itself to be a low-risk business environment for developers and investors,” says Richard Joy, Executive Director, ULI Toronto. “This is especially true in western Canada. The market shift toward urban cores and transit-supportive communities is a unique opportunity to maximize the value of new public infrastructure investment in major cities across the country.”