The annual outlook on emerging real estate trends says the move downtown, which has emerged in the past few years, will continue as more Canadians decide to stay in or move back to urban cores.
Much of this is due to changing demographics as young families and millennials forgo the white picket fence and house in the suburbs to take advantage of downtown living, where properties are smaller but offer more conveniences, said the 112-page report released Tuesday by consultancy PricewaterhouseCoopers and the non-profit Urban Land Institute.
According to Statistics Canada, the most recent numbers available show that the population of urban centres grew 7.1 per cent between 2006 and 2011.
PricewaterhouseCoopers said there are a number of factors behind the urban growth, including that Canadians are more aware of the environmental costs associated with urban sprawl as well as the cost in time and money of lengthy commutes. As well, provincial land use regulations that protect green spaces have made it more difficult to find land to develop and has pushed an explosion of condominium growth in major cities.
But one of the concerns is what will happen to these urban properties once the younger generation grows out of them. Magliocco said Canadian cities will either go the way of New York, where families are willing to sacrifice space to live in the city, or the way of London, where families are used to living outside the city and commuting downtown for work.
The rapidly growing condo markets in cities such as Vancouver and Toronto have also raised concerns about an oversupply of units and whether the boom is overly weighted towards wealthy, foreign investors who lease the units to others.
Meanwhile, an expected rise next year in interest rates from historically low levels may also influence demand in the housing market. Most felt that the Canadian market is strong enough to weather a bump in mortgage rates. “The improvement in the U.S. economy indicates that higher rates could be coming, but the economic stability in Canada and the United States will continue to attract foreign capital,” said the report. “In addition, retiring baby boomers are likely to flood the market with private capital as they look to turn stock options and retirement packages into stable, income-generating assets.”
Overall, the report sees developers responding to the needs of downtown dwellers by building more mixed-used properties, which include residential and retail space.
The report also noted that Vancouver, Calgary, and Edmonton, will see the most residential growth in 2015.
Original article from: www.vancouversun.com/homes