Multi-Suite Residential Bounces Back
Canada's multi-suite residential rental sector has bounced back strongly from the pandemic
downturn, says Morguard Corporation. Its ‘2023 Canadian Economic Outlook and Market
Fundamentals Report’ says demand will continue to trend positively in the near term. Keith
Reading, director of research at Morguard, says, "That said, commercial property performance risk will remain elevated in 2023. "Factors contributing to the increase in demand for purpose- built multi-suite residential rental units in 2022 include Canada's economic recovery which boosted employment. Young workers in the 15 to 24 age cohort were able to secure employment and transition into the rental market. Rental demand pressure also increased as international migration grew. Investors also continued to target income-producing commercial properties with secure, long-term income streams in major urban centres or with proximity to mass transit hubs in 2022. Despite an increased level of sector risk, $5.5 billion in office property investment sales were recorded in the first half of the year, which was up 187 per cent year over year and was well ahead of the previous year's pace. In 2023, some office tenants will further delay long-term leasing commitments in the office sector. As well, the retail leasing market experienced a rebound in 2022 following the removal of restrictions on brick-and-mortar store capacities. Vacancies leveled off in certain market segments, having steadily climbed across much of the country over the past few years. Looking ahead, the report expects Canada's retail leasing market to continue to stabilize. However, the probability of an economic downturn in 2023 leaves the retail property investment market exposed to elevated risk over the near term.