The reverberations of the 2014 oil price collapse are still clearly visible in Calgary skyscrapers. Property Biz Canada reports vacancy rates “still hovering north of 25%” and predicts the market will not stabilise soon. Recent trends suggest a shift away towards shorter leases and smaller floor plates. Some observers suggest a move towards residential conversions.
Rental housing could prove a lucrative way for some harassed commercial property owners. The Globe and Mail wrote, “For the first time in decades, demand for rental housing is outpacing ownership, driving rent prices higher and deepening Canada’s housing affordability woes.
“Over the same period, the percentage of home ownership fell from 68.9 per cent to 67.8 per cent, the first drop since 1971.” Thus, it is clear the Calgary residential property market has not bottomed out yet.
Has the Trend Towards Home Ownership Reversed?
Jill Atkey, acting chief executive and managing director of the BC Non-Profit Housing Association seems to think so. “For 50 years, we’ve been trending toward home ownership, but now that average and even upper-income workers are being priced out of home ownership, they are staying in rental housing for far longer,” she told Globe and Mail
This has resulted in a critical shortage of new purpose-built housing she says. The Canadian government, and Quebec and British Columbia are investing in solutions. However, these will take at least until 2020 to start dripping through. Hence purchasing to rent presents opportunities for investors of a magnitude perhaps not seen before.
Could We Be Pushing Poverty into the Countryside?
The Canada Mortgage and Housing Association believes an increasing number of Canadian renters are spending 50% and more of their income on accommodation. British Columbia and Ontario have 21% of these people, followed by Nova Scotia, Newfoundland, Labrador, and Saskatchewan. Developers are offering lower-rent solutions in satellite areas around cities.
“I think what we’re seeing, very literally on a map, is poverty being pushed out into outlying areas; the cost of housing is not lining up with the pace of income,” said Marlene Coffey, executive director of the Ontario Non-Profit Housing Association.
We Have Potentially Lucrative Opportunities in Calgary
This explosion in renters is creating a real shortage of accommodation in Canadian cities. Prices will continue to rise for as long as demand exceeds supply. Stonegate Equity Ltd has a number of suitable Calgary properties on our books. Speak to us soon while our prices are affordable. Our lines are open now.
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Mixed-Use High Rise Space in Calgary: Brian Burke BY CC 3.0