Canadian real estate trends in 2019 are expected to form in response to these three social and technological movements:
- The way people live and work is becoming increasingly remote. How will real estate adapt?
- The emergence of VR, AI, autonomous vehicles, and other disruptive technology. Will the real estate industry innovate too?
- Uncertainty in economic markets has pushed all industries to address affordability as a forefront issue, including the real estate and construction sectors.
Last but not least, an increasingly environmentally conscious urban consumer (and stricter policies on the regulatory end) will reinforce sustainability trends when it comes to energy consumption and sustainability in new real estate developments.
1. Meeting evolving social needs
As residential living spaces become increasingly flexible, they must cater to a more diverse set of needs, while maintaining enough uniqueness to drive buyer desirability.
Builders are seeing more demand from the self-employed – who prioritize loft-like spaces that easily convert into home offices and workspaces, and Airbnb hosts – who prioritize “socially-focused” architectural design such as open concept living spaces and common areas, as well as smart security technology.
The remote home buyer also wants to control household amenities, such as lighting and heating, from mobile devices. This is being addressed at the planning stage, as builders implement technological functions that easily support smart devices (for example, electric door locks or automated thermostats).
Moving forward, creativity is key when it comes to the design of real estate spaces. People are looking for unique experiences in their home and work environment, and are willing to pay a premium for it. “Experience-based” architecture is what provides leverage to real-estate-as-service companies such as WeWork and Airbnb, where design is carefully curated in response to particular demographic lifestyles.
In the retail space, landlords are also responding to rapidly shifting consumer needs by integrating sophisticated data analytics into their decision making process. For example, the owner of a supermarket might use multi-dimensional data analytics to evaluate consumer decision making or implement new product offerings. Buildings that are conducive to highly tech-driven operations will therefore be prioritized by business owners.
2. Technological transformation in real estate
Real estate is poised to integrate technological innovations such as immersive virtual reality, machine learning and predictive analytics as a means of providing creative consumer experiences. These are also helpful from the industry perspective, since they help builders and promoters navigating market uncertainty.
Data analytic technologies bring a range of opportunities at many levels – from the tenant to the landlord to the portfolio manager, to the construction manager and urban planner. On the flip side, the increased tendency to monitor multi-dimensional data and resource flow has created growing awareness about the importance of cybersecurity and data ethics.
Other technologies that are likely to impact the real estate sphere in 2019 include:
- Autonomous vehicles: As self-driven cars reduce ease commuting time and the burden of gridlock, will suburban living become more popular among the younger generation? Better connectivity in urban transportation may, in coming years, shift buyer desirability in favour of larger spaces, further away from the city core.
- Drones: Drone use is likely to facilitate various real estate tasks such as the monitoring of construction site progress, video marketing, and even speedy delivery of building materials.
- Artificial Intelligence: AI automates mundane tasks that drain industry resources, such as data entry and certain customer relations tasks. This is likely to help AI integrated businesses grow at a faster pace, while avoiding costly human errors.
- Virtual Reality: To date, VR has been used as a tool for marketing properties from a distance, allowing the end consumer to experience the space from the comfort of their home. In the future, the same technology could conceivably be used as an interactive way of allowing consumers to participate in the design of their living spaces, providing highly tailored end products at a residential or retail level. Moreover, it is quite likely that large retail spaces will integrate VR into the shopping experience, allowing customers to quickly browse and virtually “sample” products before requesting the item in-store.
- 3-D Printing: 3D printing and other forms of robotic manufacturing will be used to save time, and as well as to deliver creative and tailored design options to the consumer. Once again, the future of 3D printing could deliver interesting results in the realm of interactive design where, for example, home buyers might participate in the design of their amenities, counters, or custom fixtures.
- Proptech: Property technology, or ‘Proptech,’ is a sub-category of financial technology, which applies information technology to financial real estate transactions. For example, real estate investment apps or platforms might use automated analytic tools to advise clients towards certain market opportunities.The trend of using machine-learning apps rather than in-person business will only intensify as demographics evolve, and younger buyers seek quicker and more efficient transactions.
3. Affordability concerns and new investment opportunities
As property taxes and interest rates rise, and with many Canadian real estate markets shifting into a heated seller’s market, investors will look beyond their own markets of residence in search of investment opportunities.
As of 2018, PWC’s list of 10 most interesting Canadian markets include:
- Quebec City
Montreal Real Estate Trends – 2019
Montreal’s residential construction increased last year, in response to low levels of both condo and family home inventory. It should continue rising through 2019. The market has attracted increased interest from foreign and out-of-province investors, as it remains affordable when compared to real estate prices in Vancouver and Toronto.
There is a high level of demand in the boutique and retail space, where retailers have tailored needs that are constantly evolving as consumer needs do. The key to prolonged success in this field will be to evolve creatively, and maintain flexibility.
The office market is stable, with major commercial developments planned for the next five years.
Industrial land continues to be in demand – there is currently a shortage of vacant industrial land on Montreal Island, forcing companies to relocate to suburban areas.
All in all economic growth is predicted to reach 2.2% in 2019 and 1.9% in 2019.
Montreal neighbourhoods to watch in 2019 include:
- Cote des Neiges
- Pointe St Charles
- West Island South