Real estate investment has a future in Canada and in the Montreal metropolitan area, despite economic uncertainty and high interest rates, according to a poll conducted by Leger for Royal LePage released Thursday.
According to the survey, 11% of Canadians, or 4.4 million people, own a residential property for rent, whether it is a house, a condo, a plex, a building with fewer than five apartments or a chalet. Larger multi-unit buildings are excluded from this study, as they are considered commercial properties. A total of 1,003 Canadian real estate investors were subsequently surveyed online.
The results show that 51% of them, and 52% in the greater Montreal area, intend to buy another income property within five years.
“Canada, Quebec, Montreal, these are places where we have always had rising returns over time on real estate. If people don’t know which direction interest rates are going to go, they’re a little more cautious, but they know it’s a safe bet over the long term. The confidence is still there,” says Aline Zafirian, real estate broker in the residential and commercial sectors for Royal LePage.
In addition, 31% of Canadian investors and 26% of those in the Montreal area have considered selling one or more of their income properties due to rising interest rates. Mme Zafirian believes that this figure is not alarming.
A motivated succession
The youngest investors, those aged 18 to 34, own more properties than their elders. 44% of them own more than one building, compared to 29% for those aged 35 to 54 and 25% for those aged 55 and over. According to the observations of M.me Zafirian, the new generations increasingly perceive real estate as an investment of choice.
“They have quick access to information and opportunities through the Internet, whereas past generations were used to going there to see what was available,” says Ms.me Zafirian. Technology allows people to consider these investments, and it is a tool with which the younger generations are comfortable working. »
Furthermore, 33% of real estate investors aged 18 to 34 bought an income property when they did not even own their own principal residence.
“In my experience with this clientele, it’s quite common for young investors to stay on rent longer and live more modestly in order to bet on the future,” said Ms.me Zafirian.
Renovations in sight
The survey also indicates that 64% of Canadians and investors in the Montreal agglomeration own only one rental unit. In the metropolitan area, 21% say they own two and 2% say they have five or more. About 26% of them plan to renovate one or more of their income properties in the next two years.
Mme Zafirian points out that some of Montreal’s housing stock does need a makeover, but it’s important that landlords do it responsibly.
The poll was conducted between March 2, 2023 and March 17, 2023. There is no margin of error associated with a non-probability sample (i.e. an online panel in this case). However, for comparison purposes, a probability sample of 1003 respondents would have a margin of error of ±3%, 19 times out of 20.