Local Shopping Plazas’ Impact on Canadian Housing Affordability
As Canadian housing prices continue to rise, affordability is becoming more of a concern within the marketplace. What role do local shopping plazas play in this dynamic and what will it mean for Canadian investors?
The Affordability Problem
Canadian housing prices are continuing to rise, as new records are being set for home prices in major markets, while buyers are getting less home for their money. This factor could become even more pronounced if interest rates rise over the next 24 months.
At the same time a growing population means even more need for housing. Coverage by the Edmonton Journal shows that the city’s population is up 14.8% since the last census, to a new high of over 900,000 residents. Similar population increases are being reported in many other Western Canadian cities as well.
Rents are up too!
Recent protests in Parkdale and concerns over landlords escalating rental rates too quickly are raising concerns over affordability and homelessness. Rental rate spikes could push more Canadians to buy homes in the short term, but could put further pressure on individual and family finances.
Hawaii is the epicenter of housing affordability debates today. The situation is in dire straits in Hawaii, where billionaires are suing locals into selling their land, and hundreds sleep in homeless camps. Solutions posed there have ranged from criminalizing homeless and using the police to force the homeless out, to posing that these families could be allowed to rent driveways and yards to put their tents in a manner like Airbnb styled rentals.
Fortunately, there are other options and ways that these conditions can be headed off in Canada. Smart planning, increased public services, transportation, public-private partnerships, and other factors can be used to bolster housing, and prevent too much of a drain on taxpayers and local government.
Local shopping plazas play a role too…
By providing access to local services and shopping, residents can find it viable to live in more affordable neighborhoods, while saving money on transportation and saving time by finding jobs closer to home. These factors can help to preserve finances, even if rents go up as residents will have less of the monthly paycheck going towards other things.
For investors, the housing situation is questionable and uneven across the country. While this presents more uncertainty for residential property investors, shopping plazas offer a way to participate in a viable solution and offer a great outlook for investment performance. Participating now, could yield the best rewards in both terms of curbing affordability issues and generating the best net returns.