Canada’s real estate market continues to change and respond to shifting demands and trends. After nearly a decade of solid nationwide growth, some markets in Canada are finally beginning to cool and contract. This means savvy investors need to pay close attention to both current trends and past market actions to identify the most lucrative possible investment opportunities across the Great White North.

A look at the real estate landscape

Foreign buyer taxes, rising mortgage interest rates and more stringent mortgage qualification rules led to a nationwide cooling of the real estate market, beginning in 2018. Different regions of the country are recovering from this slowdown with varying degrees of success, depending on local economic and provincial political factors.

While real estate prices have reached and receded from record-breaking highs in Western Canada, new interest in major metropolises in Eastern Canada are spurring new growth in historically undervalued markets—particularly in Québec.

A slowdown in Western Canada, particularly in British Columbia, is significantly changing the landscape of the market in Vancouver, Victoria and the Fraser Valley. Vancouver, one of the nation’s hottest markets over the past decade, recently slid to the lowest relative demand in Canada. While this may present challenges for owners trying to sell off existing assets at a profit, it represents an opportunity for new investors seeking an inroad into the Vancouver Metro Area’s notoriously challenging and lucrative real estate investment market.

The changing Canadian real estate market is presenting investors with new opportunities to build financial independence and establish a strong real estate portfolio. Carefully analyzing both the national market, as well as regional sub-markets and neighborhood micro-markets, will provide real estate investors with the intel necessary to make informed, high-value investment decisions.

Eastern ascendance

While markets in Western Canada slow and real estate prices struggle to regain value, many historically undervalued Eastern Canadian cities across Ontario, Québec and the Maritimes continue to rise.

In February 2019, home and real estate values across the nation plummeted. Some markets are recovering faster than others. Growth in Ottawa and the surrounding National Capital Region (NCR) is significant; other regions of Southern Ontario are also seeing gains, while the Greater Toronto Area (GTA) remains stagnant.

Improved economic and political stability in Québec is leading to prominent growth in La Belle Province. The leadership of Premier François Legault’s Coalition Avenir Québec (CAQ), as well as Parliament’s 2006 recognition of Québec as a nation within a united Canada, has largely put the National Question to rest, for the time being. This is leading to increased investor confidence and economic development throughout the province.

Many market analysts, however, believe the real estate market in Montréal is now overheated, and due for a correction soon. Québec City and the Capitale-Nationale administrative region, on the other hand, is becoming an increasingly attractive market for real estate investors.

Halifax, Nova Scotia, which experienced a glut of real estate listings between 2013 and 2018, is now one of the nation’s hottest markets, with 23 percent of listings selling above-asking price in May 2019.

Where to invest?

Where to invest in 2019

The nation’s hottest markets this year may not necessarily be the best place to invest. Rather than investing in a hot market, it may make more sense to purchase real estate in a cool market showing promise of heating up again in the near future, like Vancouver and the Fraser Valley.

That said, here are some of the most promising real estate markets to consider investing in for 2019:

·        Windsor, Ontario: Windsor, Ontario is rapidly becoming one of the nation’s most sought-after real estate markets. After suffering decades of deindustrialization and disinvestment, this international port city is fast becoming one of Southern Ontario’s most desirable places to live and buy. The average home price in Windsor was $313,146 in June 2019, and the city boasts a five-year rent increase of 11.14 percent.

·        Gatineau, Québec: Civil servants and business professionals looking for more affordable residential options in the NCR are realizing Gatineau, Québec offers attainable rental rates, easy access to Ottawa’s city center and a vibrant culture. The average cost of a home in Gatineau is surprisingly low, at $269,447 in June 2019. The city’s five-year increase is a lucrative 7.38 percent.

·        Québec City, Québec: Featuring colonial charm and beautiful scenery, the seat of Québec’s government, nestled at the foot of the Laurentian Mountains, is becoming an attractive market for real estate investors. The city boasts rent increases of 6.97 percent over the past five years, and features relatively low home purchase prices, at $266,239 in June 2019.

·        Halifax, Nova Scotia: This idyllic, historic Nova Scotia city boasts one of the nation’s highest five-year rent increase rates, at a stunning 16.9 percent. The average cost of purchasing a home in Halifax, however, remains relatively affordable at $302,879 in June 2019. Halifax, long ignored by real estate investors, currently represents one of the most interesting and dynamic markets in Canada.

·        Kitchener-Cambridge-Waterloo, Ontario: Home to a number of highly skilled industrial and technical employers, the Kitchener-Cambridge-Waterloo area offers convenient access to Toronto and to the United States, via both Niagara Falls and the Detroit-Windsor tunnel and bridges. It’s no surprise rents in the area have increased by a striking 24.64 percent over the past five years. The average price of a home in the region was $490,484 in June 2019.

When determining the market that best suits your needs and objectives as an investor, consider your goals. If you’re hoping to hold onto an asset and rent it out long-term, it may make more sense to enter into a historically hot market experiencing a bit of a short-term cooling off.

If, however, you’re hoping to purchase a short-term investment property and sell it off for a profit, you’ll be better served by investing in a rapidly rising real estate market, like Gatineau or Halifax.

Savvy investors know how to weigh macro- and micro-market data against their own needs and financial objectives. Learning how to successfully analyze the national real estate mood will empower you to make lucrative, successful investment decisions on a local level.