2019 Trends In Canadian Real Estate


PwC and the Urban Land Institute have released 2019 Emerging Trends in Real Estate. The report includes an outlook on real estate investment and development trends throughout the United States and Canada.
Notably nearly 75% of those surveyed for the report were private property owners or commercial real estate developers, real estate advisory or service firms, private equity real estate investors, and homebuilders or residential land developers.

Optimizing Portfolios

One of the fascinating trends discussed in the report centres on a need for being increasingly prudent with acquisitions and allocations. Finding good deals is noted as a challenge for investors, though there is no shortage of capital.
In efforts to optimize investment portfolios, investors across the industry are cited as focusing on “improving, redeveloping or selling assets rather than buying.” To do so they are looking for ways to make more informed decisions, course correct as needed and act quickly to take advantage of opportunities at the right price points.
With segments such as retail space underperforming significantly, investors are keeping an eye to how they can rebalance and redeploy capital through redevelopment.

Digital Transformation

“The intersection of real estate and technology is a major trend in real estate.”
Digital transformations have disrupted many highly regulated industries but real estate remains one which has been slow to embrace new technology. That being said, reluctances of the past appear to be giving way with data analytics in particular as a focal point.
While many are unsure of how to best leverage data and predictive modeling, its power to help portfolio managers make informed decisions and determine the best markets to pivot into is being recognized.

Diversifying Investments

Into 2019, equity capital is forecast to remain oversupplied by and large for investment and development. This has expansion on the horizon for investors into the likes of office properties and multifamily residential opportunities.
This trend took root in increased diversification of assets in 2018 and expansion beyond Toronto and Vancouver to cities like Ottawa.
When it came to the market outlook for various types of properties, survey respondents saw development prospects for single-family housing to be the best compared to those of other major property types. Supply however remains limited in major cities and affordability a challenge in Toronto and Vancouver.
Affordability has been impacted of late by rising interest rates, higher personal debt levels and tougher stress tests on residential mortgages. According to the report “Single-family housing accounts for a quarter of residential inventory currently under construction in Canada.”

Top Markets

Condominiums remain a favourable investment, with demand following population growth and economic expansion, and house prices being out of reach for many. This is in spite of prices for units increasing rapidly in some markets, the Bank of Canada has noted.
Condominiums remain a favourable investment, with demand following population growth and economic expansion, and house prices being out of reach for many. This is in spite of prices for units increasing rapidly in some markets, the Bank of Canada has noted.
In 2018 Toronto edged out Vancouver as the top market to watch with net migration into the GTA hitting a 15-year high and a resultant demand for housing. And this is by no means to discount the buying power of current residents.

Looking Ahead

The Ontario Real Estate Association e.stimates that over the next decade almost 700 000 first-time buyers (millennials competing with baby boomers) will target GTA or Hamilton markets.
As far as development prospects go, the multifamily market has been identified as one of the top three (alongside warehousing and fulfillment and senior lifestyle housing). Considering affordability, Canada’s aging population, and keeping up with the needs of last-mile delivery and e-commerce, it’s clear to see why these categories are being projected to grow.
Find out more about emerging trends for real estate in 2019 in PwC and ULI’s full report.