Institutional Investors and the Real Estate Market in 2021

The Canadian housing market is showing signs of a rebound. Despite the pandemic, Canada’s housing market is booming as more people are becoming homeowners. After a slight standstill over the past two years, the market has fully recovered.

Many institutional investment management services including investment management firms in Toronto will encourage clients to consider entering the residential real estate market to diversify their investment portfolios, since the residential real estate market is predicted to continue growing.

Over the course of 2020, house prices went up by 9.36% in the country’s most-populated cities. According to the National Bank of Canada, the last increase this significant was back in 2016.

Growth Based on Property Type

Overall, all property types saw an increase in value, and the percentages are as follows:

  • One-storey home prices increased by 15.9% over the course of 2020
  • Two-storey home prices went up by 16.5% in 2020
  • Townhouse prices increased by 10.9% by the end of 2020
  • Condos and apartments had the lowest increase compared to other property types, and only increased by 5.2% over the same period

Out of the top 11 Canadian cities, Ottawa’s overall housing market increase was the highest at 19.69%. In second place came Halifax (16.32%), followed by Montreal (15.24%), Hamilton (15.06%), Toronto (10.27%), Victoria (7.56%), and Vancouver (7.06%). Winnipeg, Quebec, and Edmonton saw increases around or below 5%.

The only city to see a decrease in the average housing prices was Calgary at -1.47%, a city where many investment management firms in Toronto will advise caution to those buying property there..

The demand for housing continues to increase. Sales for 2020 saw a new record of 551,392 units at a 12.6% increase from the previous year.

The demand is paired with a significant but lagging increase in residential construction activity. In 2020, dwelling starts increased to 217,802 units, up 4.4% from the previous year, after seeing slight declines in 2019 and 2018. Due to the higher increase in sales compared to supplies, the national sales-to-new listings increased significantly from 54.2% to 77.4%, hitting a new record.

The demand for housing in Canada is predicted to continue increasing, while supply struggles to catch up. .

Due to this trend, the government might implement a new tax on foreign homebuyers to address the lack of affordable housing.

Institutional Investment Management Services

There are many different types of investments in addition to real estate, including stocks, bonds and funds. . Each of these will have a different risk and return profile. To be successful in this market and to maximize your profit, you need to understand how each of these investments works, and whether it is worth your time and money investing in it.

For investment and portfolio management services, contact Enriched InvestingTM—one of the top investment management firms in Toronto.

Get a Free Consultation
Get a Free Consultation X