The Edmonton Real Estate Blog

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Friday, January 27, 2006

More People are Investing in Real Estate

A report from Re/Max yesterday shows that 1 in 6 Canadians own an investment property, and close to 30% plan to buy and investment property in the next 12-24 months. Also of interest was that 43% of those that plan to buy in the next two years were under 40 years of age.

Their report speaks specifically of Edmonton real estate investments as well, stating returns have hovered at 10% annually since 2000. Forecasts call for continued increases due to a healthy Alberta economy, so more people are expected to jump in.

Here are the complete comments about Edmonton:
As housing values in Edmonton trend upward, more and more investors are setting their sights on real estate. Returns in recent years have been quite impressive, hovering at close to 10 per cent annually, since 2000. With housing forecasts calling for continued appreciation in coming years, thanks to a thriving provincial economy,
investors both small and large are capitalizing on real estate in Edmonton. Demand for income properties has been building since 2003. Spin-off from Ft. McMurray’s red-hot real estate market prompted some shrewd investors to park their dollars in income properties as early as 2003. Parents of university-age children seeking housing have also taken advantage of the upward momentum in the real estate market in recent years. Today’s investor is between 40 to 50 years of age, financially savvy and likely falls into the “baby boomer” demographic. Many have existing real estate holdings. Although a minute percentage will hire management companies, the vast majority will choose to maximize profits and self-manage. Smaller investors have found that condominiums offer an excellent starting point, with units in older, walk-up buildings starting at under $100,000. Newer units generally start at $125,000 to $150,000. The proverbial, single-detached ‘handyman’s special’ in an established, central neighbourhood can be purchased for as little as $150,000. Multi-unit residential properties are highly sought- after, but listings are few and far between. Because of limited inventory, duplexes, four-plexes and six-plexes that become available are quickly snapped-up. These properties generally start at about $250,000, but because they have more than one unit, the income potential is greater and the risk factor reduced. Despite growing demand for income properties, purchasers remain price-sensitive to all types of properties and those that are overpriced continue to stagnate.
The complete report includes reports on Halifax, Toronto, Ottawa, Edmonton, Calgary, Barrie, Winnipeg, Vancouver and Victoria and is available here.

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