MSCI executive director James Harkness. (Steve McLean RENX)
The total return on investment of all assets measured by the MSCI/REALPAC Canada Annual Property Index slipped to 6.68 per cent in 2019 from 7.3 per cent in 2018.
The property index measures unlevered total returns of directly held, standing property investments from one valuation to the next. Its goal is to enhance transparency, enable comparisons of real estate relative to other asset classes and facilitate comparisons of Canadian real estate performance to other private real estate markets globally.
The property index includes buying, selling, development and redevelopment activity data provided by major pension funds, insurance companies and large real estate owners in Canada. It encompasses 47 portfolios with 2,723 assets totalling 578.3 million square feet and a gross capital value of $184.53 billion.
Data has been collected since 1985 and the total average return since has been nine per cent. It’s been 9.2 per cent over the past 10 years.
Income return and capital growth
The income return for 2019 was 4.6 per cent, which MSCI executive director James Harkness said was the lowest ever. Capital growth was two per cent, which is also slowing.
“We’ve had 10 straight years of capital growth being positive, which is a cycle we haven’t seen before,” Harkness told an audience at the Toronto Region Board of Trade during a Jan. 31 event to reveal the 2019 property index results.
“For an asset class without a lot of volatility, we are going to see continued interest from investors wanting to have allocations in private real estate. The challenge is to find how you allocate in this very competitive environment, with prices across all sectors fairly high.”
The industrial sector had the highest rate of total return at 16.4 per cent, with capital growth accounting for 10.9 per cent of the total with an income return of 4.6 per cent.
“Industrial is driving some terrific returns and we’re certainly experiencing that, not only in Canada but across the globe,” said Teresa Neto, chief financial officer for Toronto-headquartered Granite REIT (GRT-UN-T).
Granite is a pure-play industrial real estate investment trust with a $3.9-billion market cap and $4.5 billion of assets under management in North America and seven European countries.
Neto said the property index results were consistent with what she’s seeing with publicly traded companies in the capital markets.
Residential was the second-strongest sector, with capital growth of 7.3 per cent and an income return of 3.8 per cent. It was followed by office at two per cent and five per cent, respectively.
Retail had a capital loss of 2.4 per cent and an income return of 4.3 per cent.
Halifax is top-performing city
Halifax, surprisingly, was the top-performing city with a total return of 13.3 per cent. That ranking was largely due to a very big year in the residential sector, with a 39.8 per cent return, which offset a negative 15.8 per cent return in its retail sector.
Christina Iacoucci, managing director and portfolio manager for BentallGreenOak — a global investment adviser and real estate services provider that manages about $63 billion in office, industrial, retail and multiresidential assets for about 750 institutional clients — said she was surprised Halifax placed so highly.
She noted it was largely due to large residential transactions and it likely won’t continue to be the leader in the future.
Toronto ranked second with a return of 10.1 per cent. It was followed by Vancouver at 8.4 per cent, Montreal at seven per cent, Ottawa at 6.1 per cent, Edmonton at one per cent, Calgary at 0.3 per cent and Winnipeg at minus-1.4 per cent.
“We’re not surprised to see Calgary, Winnipeg and Edmonton towards the bottom,” said Harkness. “But m,aybe some of you were expecting a bit more out of Montreal.”
While the Toronto and Vancouver markets seem to be peaking, Neto said the Montreal results tell her there’s still “more runway” there before it peaks.
MSCI REALPAC Property Fund Index
The MSCI REALPAC Property Fund Index was created in 2014 and now has these nine open-ended funds contributing to it: BentallGreenoak Prime Canadian Property Fund; GWL Canadian Real Estate Investment Fund; Fiera Real Estate CORE Fund LP; Fiera Real Estate Small Cap Industrial Fund LP; Greystone Real Estate Fund Inc.; LaSalle Canada Property Fund; London Life Real Estate Fund; Manulife Canadian Property Portfolio; and Manulife Canadian Pooled Real Estate Fund.
“This was launched in response to investors who didn’t have access to the types of properties that were in the main property index,” said Harkness.
There are approximately 1,000 assets worth approximately $37 billion in these funds, which Harkness said have been good for investors because they “have diversified across cities and sectors and been competitive.”
These property funds combined for a direct property return of 8.34 per cent, higher than that of the property index.
“These funds are valuing their assets a bit more frequently,” said Harkness. “They’re having to be a bit more nimble and they have to figure out how to position value to their investors.”
The industrial sector was again the top performer with a 16.6 per cent return, followed by residential at 10.6 per cent, office at 6.3 per cent and retail at 2.3 per cent.
Toronto was the top city with a 13 per cent return. It was followed by Montreal at 9.6 per cent, Ottawa at 9.2 per cent, Vancouver at 7.3 per cent, Edmonton at 3.3 per cent and Calgary at minus-0.6 per cent.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
