While Canadian pension plans are looking further afield for real estate opportunities, are there fresh buys on the home front?
Rental apartments are one subset of the asset class that Canadian plans should consider for domestic growth, says Jeffrey Olin, president, chief executive officer and portfolio manager at Vision Capital Corp.
Millennials are growing up, but the demographic trend pointing to their preference for urban environments over suburban homes is holding true, he says. “They want to go to restaurants, they want to walk to work, many don’t have cars and don’t even have driver’s licenses.”
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And while the oldest millennials are just about to reach 40, with some reaching life milestones of marriage, children and the subsequent need for larger living space, generation Z is close behind, following the same trajectory of demanding more rental stock than Canada’s major cities can supply, says Olin.
These trends are coupled with the influx of about 350,000 immigrants coming to Canada every year — a number projected to grow to 450,000 in the next two years. “That is a big number on our population base,” he says. “[New immigrants] live in apartments, they go to urban centres — Toronto, Montreal, Calgary, Vancouver.”
Canada’s international students are also propelling the requirement for adequate rental stock, says Olin, noting about 750,000 foreign students study here every year. “These are powerful demand factors in a sector that has seen very little supply in most markets in this country for multi-generations. So it’s a very safe place to be.”
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