BC Has Highest Rate of Multifamily Housing Starts in Canada

Multifamily real estate investments offer some of the most lucrative investment opportunities in the country. Multifamily properties generate steady streams of passive income, generating reliable cash flow, incentivizing tax benefits, and offering more affordable financing options than other properties.

In a country as vast and diverse as Canada, you can’t approach a real estate investment strategy at a national level. The country has many provincial or regional disparities that influence the value of multifamily properties. Therefore, a more targeted investment strategy holds the greatest potential for the highest returns.

So, where is the best market for prosperous multifamily investment returns? According to the latest data from the Canada Mortgage and Housing Corporation (CMHC), British Columbia had the highest seasonally adjusted annual rate (SAAR) of new housing starts in 2023.

Housing starts up 11% in BC, driven by multifamily buildings

The numbers show that total housing starts across British Columbia amounted to a SAAR increase of 11%. The CMHC points to spikes in new multifamily residential housing units as the driving influence behind BC’s above-national-average gain in new housing starts.

The monthly SAAR of total national housing starts increased 20% with 234,705 new units reported. These gains were largely driven by increases in the supply of multifamily housing developments across the country with 191,463 new additions. By contrast, the number of single-detached housing starts decreased by 2% with a total of 43,242 units.

The rate of multifamily developments varied by region in BC

While British Columbia reported the highest SAAR gain in multifamily housing developments, those gains were not consistent across the province. Unsurprisingly, Vancouver was the dominant market for multifamily residential properties with a posted SAAR gain in multifamily housing starts of 92%.

However, within the interior of the province, housing starts — including those for multifamily residential properties — were down in the final quarter of 2023. In Kelowna, the third largest city in the province, housing starts were flat while Kamloops posted a 12% decline in new housing starts.

According to experts, the impact of higher interest rates impacted financing for new housing projects, including multifamily developments. Higher costs for construction materials and labour were also cited as driving down the number of new housing starts in the interior of BC.

Multifamily starts up in Vancouver but sales are down

The higher financing and construction costs aren’t only contributing to slowdowns in new housing starts in the BC interior. The impact of higher interest rates on financing for multifamily real estate also contributed to a net decline in new multifamily investments in the province’s largest cities.

According to data from the CBRE’s National Apartment Group index, multifamily real estate investments were down 30% across Vancouver and Victoria in 2023. The CBRE noted that transactions improved in the second half of the year, but they still posted down on an annual level across the two metropolitan markets.

How does all this data impact your investment plans?

There’s a lot of data to digest in this piece. The long and short story is that multifamily housing starts are underway at higher rates in British Columbia than in most other regions of the country. While the number of multifamily investments was down in 2023, real estate deals did improve in the second half of the year, suggesting the market is expanding once again in 2024.

Vancouver remains one of the hottest housing markets in all of Canada, driven by rampant demand for multifamily rental housing in the city’s most attractive neighbourhoods. Additionally, the BC government’s statisticians predict the population of Metro Vancouver may surpass 3 million people before the end of the year.

A growing population is music to an investor’s ears

Fundamentally, strategic real estate investing is a matter of simple economics. Economies rise and fall based on a delicate dance between market supply and market demand for goods and services. As a real estate investor, it’s important to understand the variables that influence supply and demand for real estate properties.

In times when interest rates and inflation increase the cost of everything, developers are less incentivized to move forward with new housing projects. As a result, the supply of vacant multifamily units for rent tightens up. As landlords and property owners, you have leverage to dictate rental prices that pocket a little extra to increase your monthly cash flow.

At the same time, a regional population that’s forecast to hit a milestone is incredible news for investors targeting the lower BC mainland. People who arrive in Metro Vancouver will need affordable housing to rent and make a home for themselves.

As a result, if you own property within Vancouver, your tenant vacancy rate is likely to decline. That means you will maximize the amount of revenue you can generate from a multifamily building in Metro Vancouver. Consistent streams of monthly rental income will increase the value of your real estate empire and help you create the pillars of generational wealth.

Learn how to spot multifamily investment trends in the ultimate real estate education community

If British Columbia is on your real estate investment expansion map in 2024, that’s a very savvy strategy to follow throughout the year. Additionally, the more you can concentrate around the lower mainland in the Greater Vancouver Area, the more value you should gain from your real estate investments.

Still need more tips to move ahead with your plans? Why not join a community that celebrates the exchange of knowledge and support to help real estate investors across Canada fly as high as eagles.

By becoming a member of the fastest-growing real estate education community in the country, you’ll receive direct mentorship from some of the most successful investors across the country. WealthGenius specializes in multifamily real estate investment strategies, so you’ll receive all the useful advice you need to build a multifamily empire of your own.

 

Ready to make some magic in the lower BC mainland? Join the community today and learn how to capitalize on prime market conditions along the Canadian west coast.