How customer-specific demands are influencing the realty market in Canada

The real estate sector in Canada is being influenced by government policy changes, affordability of housing and technology disruption. With the 2020 emerging trends in real estate, developers, investors, lenders and even lending institutions are optimistic. The report would be published by PwC Canada and the Urban Land Institute. The focus for 2020 would be mid priced apartments, transit oriented development and warehousing.

In case of residential real estate, it has been seen that the first results of mortgage stress test, that had restrained activity in the markets of Vancouver and Toronto, saw homebuyers exit the market as traditional financing was not an option for them. An unregulated lending market had emerged and it had resulted in greater consumer and market risk. The respondents of a survey rated construction, material and land cost, along with approval process as the top issues they want to be looked at in 2020. Many of them are supply related issues where the government will play a role. There is also an opportunity to do more as government and real estate industry will embrace the mutually beneficially approaches to housing supply issues. It will also increase density around the transit hubs of the city.

What the Government should do

The government must take note of the increased supply which will address the affordability issue and adapt innovative ways of unlocking a supply constrained market, as was opined by a senior official of PwC. It has been agreed by industry experts that more innovation was needed in terms of making better land use, fiscal and technological tools so that it can have a wider scope of housing options, especially in the tight markets of Canada.

Customer expectations are also rising and that has also influenced commercial real estate. The workplace practices are changing, and remote and flexible working environment is being created. There had been a push for amenities and there is a need to make office environment as attractive as possible to retain top talent. It will shape the real estate significantly.

What industry experts predict

There are also expectations regarding same day e- commerce deliveries which will continue to spark demand for large scale facilities that are close to population centers and transportation routes. There are misconceptions that rise in e commerce will affect the brick and mortar stores. In fact, retail remains a very crucial factor for the last mile delivery. With the increase of online shopping in Canada, the requirements for dedicated spaces for deliveries as well as cold storage for food deliveries are important trends in the growth of multifamily residential sector.

On the other hand, proptech is covering everything from new lending services to construction technology and had transformed the way in which properties were purchased, build, sold and then managed. There had been a massive surge in proptech investments recently and it had reached a record US$ 6.3 billion across 382 deals in 2019. Customers are now on the lookout for digitally enabled, mobile friendly spaces and the real estate industry is also exploring new applications across all technology spectrums. The focus is primarily on building smart buildings, with concentration on making it energy efficient and embedding IoT powered sensors in the systems. Digitization and cyber security are taking precedence as cyber attacks have been on the rise.