Decoding today's housing market: What's trending and what's worth your investment
Buy, sell, or move in with mom for a while? A real estate agent weighs in
With everything that's going on in Canada's housing market right now it's hard to keep on top of the current real estate trends. There's talk of a so-called housing bubble, but is it wise to buy now, or wait? Is real estate still a smart investment? It's a challenging market to say the least. We've got questions, and we're sure you do too, so REALTOR® Meray Mansour stopped by The Goods to help keep us in the know about the market that has everyone talking.
The hottest trend
The number one trend across Canada right now is the demand for multi-family housing. This means we are going to see more apartments, more condos and more buildings that can house multiple families. If you're looking to invest in an income property, Meray believes this might be the best investment to make because supply is not meeting the demand. Canadians need more multi-family housing because of population increase, lack of affordable single-family homes, and land becoming more scarce, so developers are seeing opportunities in redesigning existing mixed-use spaces and buildings.
The housing market in Toronto is a good example of how the demand for multi-family housing is affecting rental rates. Prices have skyrocketed for condos and the city is experiencing the lowest vacancy rate in history, so developers are trying to capture this market by making rental-only buildings. The rest of the country is experiencing a rise in rental rates as well, which is a consistent cause for concern across all major cities in Canada.
The new starter home
It used to be that couples would look for a single dwelling family home when they decided to buy, but these days, most of them are being priced out of that market. Condos are now the more affordable option, especially for urban dwellers. But they're also the first choice for seniors looking to downsize, making condos a hot commodity and they're poised to perform steadily with increased demand in most markets.
If you're waiting for the real estate bubble to pop, Meray doesn't foresee that happening anytime soon because the supply is so low, but demand and population continues to grow. Prices have adjusted in some neighbourhoods, especially for single family dwellings, but the condo market is the hottest it's ever been. Her advice is that if you are able to get into the market, now is still the time to buy.
The demand for low-maintenance living
Canada's aging population means that there's also an increased demand for senior housing facilities. The truth is there are simply not enough options for the baby boomer population and they don't have a lot of choice once they decide they need to leave their single family homes. Seniors are looking for walk-ability and a more low maintenance lifestyle and adult children are being faced with the challenge of where their parents will live when they require care. As a result, developers are jumping on this demand and building planned communities in urban and suburban areas.
This growing need for senior housing is exactly why we're seeing a huge increase in multi-generational living. Designers are paying more attention to the needs of seniors when they plan housing layouts, adding additional entrances for privacy and other creative uses of space. So, Meray believes that if you're looking to invest, this trend is something to definitely keep in mind.
The placemaking trend
Buyers and investors are currently drawn to small urban communities that include lifestyle services in wellness, retail and entertainment. Recently, developers have been moving away from one-off projects and planning complete neighbourhoods instead. They are making 'places' not just spaces, creating an experience and culture while providing things for people do to throughout the day and into the night, no matter where they live. And as new transit lines in major Canadian cities prove to be a magnet for real estate developers and investors, the industry is paying more attention to the idea of placemaking. In many ways, it's an evolution of the industry's recent focus on mixed-use properties and creating communities fusing residential, commercial, retail and service properties. As much as some of us love urban living, all signs point to the suburbs soon offering up these types of communities. This shift also means that you never have to go far to have all your needs met and you may be able to live for less.
The current market
The market is unstable but not alarmingly so and there is only a slight dip in the economic growth rate this year. Therefore, Meray believes that real estate is still a great investment if you can afford to get into the game. Last year the government initiated the stress test for people who are putting down less than 20% on their mortgage, now the most recent rule states that everyone must undergo the stress test. Simply put, this will affect the amount that buyers will be approved for a mortgage, so if they do not have more money to use toward their downpayment, they will be forced to purchase a property that is less expensive.
Whether you're thinking about buying or just plain curious, Meray believes it's great to know about the trends so you can make an informed decision – real estate investing is never an easy thing and should not be rushed into. Pay attention to the trends, see where the needs are, educate yourself, and you'll be able to invest smarter.