There’s nothing new when we say 2020 has been an unpredictable year. And this vulnerability has impacted in a particular way the real estate market, which has grown surprisingly in the middle of the current pandemic.
While a second coronavirus wave hits, we are conscious that considering to buy a property might generate some anxiety or fear when we are just eight weeks aways from 2021.
With this landscape in mind, PwC Canada and the Urban Land Institute teamed up to present the real estate trends to look for next year.
According to this report COVID-19 impact on retail, office spaces and suburbanization has changed the way developers, buyers and sellers operate. The report suggests the best opportunities in 2021 are located in warehousing and fulfillment, multifamily residential and medical office space.
Here are some relevant points from this report that is composed of 117 pages and is based on interviews and surveys answered by almost 3,000 investors.
Residential Real Estate
More people are looking to live outside of big cities like Toronto, Montreal and Vancouver where housing is more affordable and with more space in the middle of the work from home reality.
That’s why the forecast indicates that more people will be moving into what is known as 18 hour-cities, described as mid-sized cities where there is a higher than average growth of the population, and where the cost of living and making business is lower in comparison to bigger cities.
Commercial Real Estate
Retail and Warehousing
The report points out warehousing and fulfillment spaces are the number one bet, in the sector that has suffered the biggest impact during the pandemic. As a consequence, eCommerce businesses have grown and paved the way for the need of warehousing space.
Those who answered the surveys, indicated that malls with excess lands need to be re-imagined for residential and/or mixed-use as warehousing, fulfillment and logistics space; in order to satisfy the increasing demand on online shopping.
The uncertainty around “going back to the office” sparked diverse opinions between those interviewed. Some predicted that the desire of social reconnection will result in employees returning to the office; while others indicated that office space in the suburbs will be the new trend.
Medical office space
While hospitals continue to operate from limited spaces during the pandemic, the report mentions that there is an opportunity for moving some of these treatment units to spaces with more community traffic, such as malls.
While the pandemic has pushed the rapid adoption of virtual health services, there is still going to be the need for creating physical space to attend those that can not be virtually taken care of.
Additionally, the report indicates that the aging population will put some pressure on the healthcare system and this will cause a shift when repurposing medical space while doctors adapt to virtual appointments.
Before COVID-19 the real estate market was on the cusp of adopting spaces for property technology. And the digitalization of this sector has accelerated the process.
Looking at the future, it is expected that the demand for these spaces in 2021 will be around businesses that can offer digital solutions, sales platforms, amongst others. In addition, the report points out that the other areas we must pay attention to are data analytics and cybersecurity.
The report concludes that the markets people need to keep an eye on it are those located in Toronto, Vancouver, Montreal, Ottawa and Québec City.
Are you looking forward to investing in any of these markets but have some questions? Contact us and we will gladly help you out on your next investment.