Real estate has long been considered a valuable investment avenue, and Canadians are no strangers to its allure. In fact, recent findings from a Royal LePage survey indicate a flourishing interest in investment property ownership across the country. With over 1 in 4 Canadians intending to acquire real estate within the next five years, the landscape of wealth-building is undergoing a significant transformation. In this article, we delve into the survey’s highlights, shed light on the preferences of Canadian investors, and explore the burgeoning interest among young adults in real estate as a key element of their financial planning.
Investment Property Ownership in Canada:
The numbers paint a fascinating picture of investment property ownership in Canada. As of now, approximately 4.4 million Canadians are proud owners of investment properties, showcasing the enduring appeal of real estate as a means of generating income and fostering long-term wealth. The survey reveals that 26% of all Canadians express a likelihood of purchasing an investment property in the next five years. Moreover, a notable 32% of Canadian real estate investors already own two or more properties, indicating a growing trend of portfolio diversification.
Young Adults at the Forefront:
While young adults often face difficulties when entering the property market, the survey uncovers a noteworthy trend among the 18 to 34 age group. Young Canadians are more inclined than ever to embrace real estate as an investment strategy, with 44% of them already owning two or more residential properties. In comparison, older counterparts aged 35 to 54 own fewer properties (29%), while those aged 55 or older own the least (25%). Surprisingly, 67% of younger investors in the 18-34 age bracket prioritize investing in property over owning their primary residence, emphasizing the shifting mindset towards real estate as a long-term wealth-building tool.
Factors Shaping Investment Decisions:
Location, amenities, and property type remain essential considerations for Canadian investors. Single-family detached homes dominate as the most popular investment property type, with 44% of investors opting for this option. Condominiums follow closely at 37%, while townhomes make up 11% of the market. When making investment decisions, factors such as the potential for property value appreciation over the long term (69%), positive monthly cash flow (54%), and low maintenance costs (44%) rank highest among the priorities of investors.
The Impact of Economic Uncertainty:
The global economic uncertainty of recent times has not escaped the attention of Canadian investors. Higher lending rates have led 31% of investors to consider selling one or more of their properties. Younger investors in the 18 to 34 age group are particularly likely to contemplate this decision, with 54% weighing the option. However, it’s worth noting that the downturn experienced by the investor segment during the pandemic was temporary. As the real estate market recovered, demonstrating its resilience, investors found stability and reaffirmed the importance of seeking guidance from experts for sound, long-term investment decisions.