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Top British Columbia Investment Towns
- Maple Ridge & Pitt Meadows
- Fort St. John
- Dawson Creek
- Prince George
Source: REIN Top BC Investment Towns 2013-2018 Report
Top Alberta Investment Towns
- St. Albert
- Red Deer
- Fort Saskatchewan
- Fort McMurray
- Grande Prairie
Source: REIN Top Alberta Investment Towns_March 2014
Geographic Areas of Specialization
When investing in real estate, we follow the real estate investment success formula to choose geographic areas based on their economic fundamentals such as GDP growth, population growth, job growth, and low rental vacancy rates. Every property we select is analyzed for future growth and monthly income potential. We go through an extensive property checklist to ensure the investment is sound prior to presenting them to my clients.
Areas that we specialize in B.C. are Vancouver, Surrey, Abbotsford, Kelowna, and Fort St. John (Northeast BC) and Calgary and Edmonton in Alberta.
A number of factors will contribute to rental demand in the Vancouver CMA. Population growth in the CMA, combined with the recent jump in home prices, is expected to keep demand high for rental accommodation around Vancouver. The population is forecast to expand by 1.2 per cent in each of the next two years, helped by interprovincial migration, and new job creation. In addition, the high cost of homeownership in Vancouver is expected to keep many in the rental market longer as they save for down payments. Consequently, the rental vacancy rate for 2015 is expected to fall to 0.8 per cent, the first time it has been below one per cent since 2008. It is expected to rise only slightly to one per cent in 2016 and 1.2 per cent in 2017. Supply of rental units is expected to increase to help alleviate some pressures from the growing base of renters.
Demand is also being met by a large and growing secondary rental market of investors renting out condominium units. It is now estimated that over one-quarter of the stock of condominiums in Vancouver are rented, about 51,600 units, and that these condominiums now account for about one-third of the universe of market rental units . Demand is indeed strong, as the vacancy rate for these secondary rental units is an even tighter 0.7 per cent.
Average rents for both one and two bedroom units are expected to increase by 2.9 per cent in 2016, in line with the provincial allowable rent increase5 , with some possible upside risk as some rental units are renovated. Rents are forecast to rise by 2.2 per cent in 2017.
– source: CMHC Housing Market Outlook – Vancouver and Abbotsford CMAs – Date Released – Fall 2015
Surrey’s forward-thinking economic development team is working on the next phase of its Build Surrey program, with the goal of attracting more businesses and providing a high quality of life for residents. Phase one of the project is already completed (including the relocation of the RCMP E-Division building) – and was an astonishing success. The second phase of the project will include a Performing Arts Centre and Contemporary Arts Space and Gallery, the construction of the East Clayton Recreation Centre, and an Athletic Park in Newton. Thousands of jobs are being created in Surrey, with over 2,000 new businesses launching in the city each year and 800 new residents calling the city home every month.
– source: The REINscore Surrey Edition, February 2015 , Cutting Edge Research Inc.
The biggest development the City of Abbotsford has ever seen was completed at the end of 2013. As the largest retail development in B.C. in the past 30 years, High Street Mall is a 600,000 square foot shopping centre. Once fully occupied, High Street is expected to provide Abbotsford residents with 1,000 new job opportunities5.
Abbotsford’s close proximity to key transportation infrastructure including the Trans-Canada Highway, U.S. border crossings, and the Abbotsford International Airport, make the city a prime location for industrial businesses. We will see new industrial developments spring up in the city’s newer industrial areas: Mt. Lehman Industrial Area, Peardonville Industrial Area, and Clearbrook Industrial Area, south of King and Marshall Roads.
The proposed development of the U District (around the university), 165 acres of mixed use residential, commercial, and institutional property, has a 30 year outlook and seeks to develop and improve the area. The developed space will lead to more jobs being offered, leaving a large opportunity for positive cash flowing properties within the district.
source: The REINscore Abbotsford Edition, November 2014 , Cutting Edge Research Inc.
The rental market in the Kelowna CMA has been supported over the past five years by a combination of post-secondary students, people moving to the region, and residents who choose to rent rather than own. Apartments in and around the University of British Columbia – Okanagan (UBC Okanagan) will continue to attract students from throughout the B.C. Interior, while growing employment opportunities
in the area are expected to support population growth via migration.
Moreover, the attractiveness of the Okanagan region for retirement and lifestyle choices will provide additional support to population growth and demand for rental housing. Current population projections for the Kelowna CMA over the 2015-2017 period support this outlook and show that individuals between the ages of 25-40 and 55+ will be the fastest growing segments of the population. Based on these projections, the Kelowna CMA is expected to add over 1600 households annually through the 2015-2017 period.
Rental vacancies in the Kelowna CMA reached their lowest point in 2014 with the results of the Fall Rental Market Survey showing an apartment vacancy rate of 1.0 per cent. Continued development around UBC Okanagan, both on campus and private development off campus, as well as Kelowna General Hospital will support construction of purpose- built rentals going into 2016.
– source: >CMHC Housing Market Outlook – Kelowna CMA – Date Released – Fall 2015
Fort St. John, BC
Fort St. John is BC’s “Oil and Gas capital” and is estimated to have one of the largest natural gas deposits in North America – most of it still largely untapped. People are moving to the region in droves because of the high wages and ease of getting to work and this is compounding an already existing constricted housing supply problem. The city is nicknamed “the Fort McMurray of BC,” and it’s not far from the truth. The city’s current fundamentals echo Fort McMurray, Alberta 10-15 years ago.
With several major projects set to be completed in Fort St. John during the next decade, the city will witness rapid population growth. The completion of the new Fort St. John hospital in 2012 and the opening of the Site C dam project in 2020 will re-establish the city as a hub for northeastern BC. The ripple effect created by these two major projects will increase rents and home prices in the region, making it even more desirable to investors and businesses.
– source: REIN Top BC Investment Towns 2013-2018, Cutting Edge Research Inc.
The largest city in both population and economy on the prairies, the City of Calgary offers residents with amenities and business opportunities found nowhere else in the province. The city is home to over one million residents and growing every day. And as you dig deeper into the numbers, you find even better news for the housing market. With only 9.8% of Calgarians above the age of 65, the majority of the population is just heading into their peak earning and spending period of their lives, which will increase the upward pressure on rental and housing values- even if the economy slows. Real estate agents serving investors have noted that good inventory is very hard to come by.
When you combine the economic fundamentals, the population growth, and a burgeoning provincial economy, it is easy to see why so many businesses and peole have come to call the city home. However, the City of Calgary and its residents took a big hit in 2013, as nature doled out rain and caused flooding like never seen before in this region. The housing sector took a big hit as homeowners and renters lost their homes permanently or were displaced. As a result, vacancy rates have tightened and rents have gone up as inventory has shrunk.
– source: REIN Top Alberta Investment Towns 2013
They say investing is about location, location, location, and Edmonton is at the centre of it all. The city has staged an impressive comeback over the past couple of years, its diverse economy providing it with stability not experienced in other parts of the country. The city’s population continues to grow and get younger. This is great news for the housing market as demands for rentals, as well as property purchases, have been proven to continue for longer cycles with younger median populations. The city is now attracting more international investment (and workers) than ever before, due to its unique position as Canada’s most diverse and stable metropolitan economy.
In the next few years, Edmonton will need to ensure that it is providing enough housing for the next wave of people moving into the city to fill jobs vacancies. During the plateau of 2008, the city’s real estate market shook out a lot of speculators, allowing a return to more stable market conditions. With Edmonton’s economy beginning to fire on all cylinders again, now is a good time for city officials, property investors, and developers to plan for the future growth so they don’t get caught in another “feeding frenzy” like the one we witnessed in 2006.
The city is experiencing historically low vacancy rates. This combined with increasing rents and low interest rates, will put more pressure on house prices as a lot of renters decide to become home owners.