Profiting from an ImbalanceDecember 4, 2018
A Supply-Demand Imbalance Creates Strong Investment Opportunities
The imbalanced market for places to live is creating opportunities to profit in the multi-residential apartment sector.
Equiton is uniquely positioned to help investors profit through our proprietary approach. Explore reasons for the opportunity below:
KEY REASONS FOR THE IMBALANCE
Demand is increasing because of:
In 2017, Canada’s population grew by a record 518,588 people (strongest among G7 countries) and the federal gov't plans to admit over 1M new immigrants by 2020.
SOURCE: STATISTICS CANADA
SOURCE: STATISTICS CANADA
The high costs of home ownership is forcing more people to rent. This trend is continuing to accelerate because of rising interest rates and more restrictive mortgage qualification rules.
Younger generations are renting longer with many destined to be lifetime renters, baby boomers are selling their homes to fund retirement and new immigrants can spend a decade or more before they have the capital or credit to buy.
The past stigma of renting is disappearing with many now making the choice to live a more flexible lifestyle free of ownership burdens.
Supply is being restricted because of:
LIMITED NEW DEVELOPMENT
Restrictive land use policies, including greenbelt legislations, lengthening development timelines and lagging infrastructure are keeping the supply of new development sites tight for the foreseeable future.
The extremely wide gap between the price to buy existing apartments and the cost to build new makes new construction unfeasible in most markets today and for the foreseeable future.
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