Urban Living leads 2015 Canadian real estate trends – PwC report

According to the latest PricewaterhouseCoopers (PwC) and Urban Land Institute joint report released last Tuesday, homeowners’ preference of convenient city life over more generous suburban life are driving Canada’s real estate markets.

Based on an annual outlook on real estate trends, moving downtown has emerged in the past years and will continue to do so as more young families and millennials choose to settle in or move back to urban cores at rapid speed.

Much of the urbanization trend – living from rural to urban in search of better opportunities – is due to changing demographics as more Canadians give up the white picket fence and house in the suburbs to take advantage of ‘the new normal’ urban living even if houses are smaller.

The most recent data of Statistics Canada showed that between 2006 and 2011, the population of city cores across much of Canada raised by 7.1 percent.

PwC Canadian real estate leader Frank Magliocco asserted that ‘there are causes behind the downtown growth, including that the citizens are now more aware of the environmental costs associated with urban recline as well as the cost in time and money of lengthy commutes.’

Difficulties in finding land to develop because of provincial land use regulations for environmental protection are pushing rental-apartment and condominium growth in urban areas. Such an example is Toronto’s Greenbelt involving about 800,000 hectares of protected land from Peterborough to Niagara Falls.

This trend continues to blur the boundaries between commercial and residential development in city centers, as more retails, offices and residential units are constructed in the last decades to meet the high demand. Despite having positive urbanization, the report noted that there are big questions for the future. It asked about what will happen to these downtown properties once the lifestyles of today’s younger generation changed.

According to Magliocco, Canadian cities will be like their counterparts in other parts of the world. They will either go to the way of New York, where families raise their children in small-spaced apartments and live in the nearby city, or the way of London, where families live in larger homes in the suburbs and take long commutes for work.

Toronto and Vancouver have already raised concerns about the oversupply of units and whether the boom is biased towards wealthy, foreign investors who lease the units to others.

Next year, it is projected that interest rates will rise from previously low levels. This may pressure demand in the housing market. But based on a consensus from private property investors and real estate service firms, the Canadian market is sufficiently strong to weather an increase in mortgage rates.

With reports from Vancouver Sun and Cyra Moraleda