There has been a chronic undersupply for many years due to residential property construction and geographical constraints around our major city centers causing a lack of close buildable land.
Opposing political parties never agree but this is a dominating key issue in the election campaign.
In the 2021 Federal Election, the Liberals, Conservatives and the NDP parties all agree that there is a housing crisis, as does most of the population.
The three key points of agreement are:
- Many Canadians cannot afford homes to own or rent and the problem is getting progressively worse,
- There are not enough homes for the population so each party has pledged to add more quality housing units, and
- Foreign investment is increasing single family home property values.
There may be a small dip in real estate values over the short term, but the market will bounce back very quickly and eventually start rising again as the increasing demand will just keep pushing prices as there is not enough raw land to expand to and the housing shortage has been decades in the making.
The Liberals, Conservatives and NDP parties all want more growth in construction of homes for Canadians to help offset increased population growth and address chronic under supply.
We need quality affordable rental housing, which requires investors.
Real estate investments may not be as exciting as tech stocks, but the industry has experienced solid growth with an indisputable way to determine valuation. Income (cap rate) or sale prices of existing buildings on a price per square foot for commercial or price per unit for comparable multifamily residential. These methods give the investor a very tangible way to value their investment(s) and make it easier to determine if an offer is good or extremely generous.
The stock trajectories of real estate companies speak volumes:
Boardwalk REIT (BEI.UN TSE):
April 4, 1996 – $ 3.00
Aug 30, 2012 – $ 46.88 (+1,462.67%)
Canadian Apartment Properties REIT (CAR.UN TSE):
July 9, 1999 – $ 11.05
Aug 30, 2021 – $ 61.31 (+454.84%)
Allied Properties Real Estate Investment (AP.UN TSE):
Feb 21 2003 – $ 9.90
Aug 30, 2021 – $ 43.59 (+342.99%)
Granted, we are not a REIT but all real estate investment funds started somewhere and with our long-range goal of acquiring solid properties with good revenue streams and with desirable locations, we are anticipating solid, long-term growth.