Apartment markets across Canada are changing. With rising vacancies, shifting rental rates and billions of dollars in new construction underway, are developers facing an oversupply problem today and a housing shortage tomorrow?
In this episode of the RMS Real Estate Development Podcast, Curtis Way welcomes Paul Chaput, an experienced apartment investment professional, for an in-depth look at the state of Canada's multifamily real estate market, with a particular focus on Western Canada.
Paul shares what he's seeing in apartment investment activity across Edmonton, Calgary, Winnipeg, Regina, Saskatoon and Vancouver, including why Edmonton has emerged as one of the country's strongest markets for apartment transactions. With approximately $1.3 billion in Edmonton apartment sales over the past 12 months compared to $585 million in Calgary, the differences between these two Alberta markets are becoming increasingly significant.
Curtis and Paul explore the factors driving those differences, from rental rates and vacancy levels to capitalization rates, construction costs and CMHC financing. They discuss why some investors are finding better opportunities in Edmonton, why Calgary's rental market has softened and how financing programs continue to shape the economics of apartment development and investment.
The conversation also turns to Vancouver and Toronto, where struggling condominium markets are forcing developers to reconsider their projects and explore purpose-built rental housing. Paul shares insights from the Canadian Apartment Conference, including how investor sentiment is changing and why some Eastern Canadian investors are beginning to look west for opportunities.
Curtis and Paul also examine the challenges facing condominium investors, the growing trend of converting older condominium buildings back into rental properties and the difficult financial situations some owners are experiencing.
Looking ahead, they discuss one of the biggest questions facing Canada's housing industry: Could today's apartment oversupply lead to a significant rental housing shortage in just a few years?
With thousands of units currently under construction but fewer new developments getting underway, both Curtis and Paul see potential opportunities for well-capitalized developers willing to take a longer-term view.
In This Episode:
- Why Edmonton is outperforming Calgary in apartment investment transactions
- What's driving changes in apartment rents and vacancy rates
- How capitalization rates compare across Western Canadian markets
- Why CMHC financing is so important to apartment development and investment
- The impact of high-leverage financing on apartment purchases
- Opportunities and challenges in Winnipeg, Regina and Saskatoon
- Why Calgary's apartment market is experiencing increased pressure
- The challenges facing Vancouver's condominium and rental markets
- Why developers in Toronto and Vancouver are shifting from condos to purpose-built rentals
- What investors are saying about Western Canada at national real estate conferences
- How investor confidence is changing across Canadian markets
- The challenges facing owners of older condominium investments
- Why some condominium buildings are being converted back to rental properties
- The potential impact of thousands of new apartments entering the market
- Why declining construction starts could create future housing shortages
- The importance of strong balance sheets and financial flexibility
- How experienced developers position themselves for the next market cycle
The key takeaway: Real estate development is about looking beyond today's market conditions. While rising vacancies and slowing rents are creating challenges in some Canadian cities, fewer new projects today could mean significant opportunities for developers who are prepared for the next cycle.
For developers, investors and anyone involved in multifamily real estate, this episode offers a practical look at where Canada's apartment markets stand today and where they may be headed next.
To learn more about the RMS Group, please visit:
https://rms-group.ca/This series was produced by Road 55 in Edmonton, Alberta – Learn more at:
road55.caWhat is Real Estate Development: The Curtis Way?
Ever looked at a vacant piece of land and wondered how it becomes an apartment building, shopping centre, or thriving commercial property?
Join the team at RMS Group as they pull back the curtain on the world of real estate development. Through conversations with developers, investors, lenders, brokers, lawyers, property managers, and construction professionals, we'll explore the wins, the mistakes, the risks, and the opportunities behind every project.
From proformas and financing to market cycles, approvals, construction and property management, this podcast is designed for aspiring developers, experienced investors, and anyone interested in how great real estate projects get built.
Real stories. Real deals. Real lessons from the people doing the work every day.