White Hot North: Residential Real Estate Investment in Canada
Residential real estate is breaking records in Canada. As of Q4’2020, it accounted for 9.3% of the country’s GDP.
The purchase, sale, and construction of new homes in Canada currently makes up more of the country’s economy than it does in any other developed country.
There’s No Place Like Home
So why is there so much investment going into building residential structures? Here’s a look at just a few reasons:
- Increased immigration to Canada
- Falling mortgage rates
- Increased saving rates
The steady flow of immigration into Canada is a significant factor behind increased residential real estate investment. Prior to the pandemic, the country welcomed around 300,000 newcomers per year—increasing the demand for housing, particularly in urban hubs like Toronto and Vancouver.
Mortgage rates have also been steadily falling, making it easier to purchase a home. As of the latest 2020 data Canadian 5-year uninsured mortgage rates sat at 2.1%, compared to a steep peak in the beginning of 2019 at 3.7%.
Additionally, some individuals may have become more capable of affording a new home as increased saving rates have become a widespread trend during the pandemic, potentially adding to demand. This combined with increasingly flexible remote work options are increasing (Read more...)