From Halifax to Victoria, Montreal to Moncton, the housing market across Canada continues to heat up with no cooling in sight. While cities like Toronto and Vancouver continue to see prices trend ever skyward, it’s not just the major hubs that are seeing outrageous numbers. Fueled by remote work and families seeking more space, Canadians across the country are confronting rising prices in suburbs and small towns well outside city centres.
Canada Real Estate Barrier
What’s most alarming to younger, first-time buyers is that increasingly, those buying up property across Canada are those who already own property. Bank of Canada deputy governor Paul Beaudry spoke to the Ontario Securities Commission on November 23, noting a surge of investors – those buying properties who already have a primary residence – has helped boost growth in the market. With optimistic investors snagging up houses and condos, it’s that much more difficult for inaugural buyers, particularly Millennials and Gen Zers, to breach a housing market that was already expensive to begin with.
High housing prices require a steep down payment. In Canada, buyers are required to place a 5% minimum down payment on properties $500,000 or less, but unfortunately most houses aren’t priced below that mark.
According to the Canada Real Estate Association, the average price for a house in Canada in November 2021 was $720,850, continuing an upward trend. The excess amount of money over $500,000 requires an additional 10% downpayment; any properties listed at $1 million or up call for a 20% downpayment. These steep thresholds are simply too difficult for most first-time buyers to overcome.
Not surprisingly, expensive real estate markets such as Toronto, Vancouver, and Montreal are cities with some of the lowest home ownership among those ages 20 to 39, which includes Millennials and Gen Zers.
Crowdfunding Real Estate
One of the ways to chip away at that ever-hardening barrier is through innovative crowdfunding. As championed by addy, crowdfunding real estate allows a group of people to contribute together towards what would be an otherwise insurmountable cost going at it alone. Instead of a single person or couple working hard to secure a downpayment, Canadian crowdfunded real estate welcomes thousands of people to contribute as little as $1 towards a common goal, reaping rewards in the years to come.
addy currently enables investors in Ontario, Alberta and British Columbia with expansion coming soon in more provinces so as to offer Canadian crowdfunded real estate across the whole country. Single-family homes or individual condos are not part of addy’s portfolio. Instead, addy focuses on institutional-grade commercial real estate, which includes entire apartment buildings, commercial properties, business complexes, and recreational properties such as RV-Resorts to name a few. addy affords the average Canadian the opportunity to invest in real estate opportunities that are generally reserved for the 1% of Canadians (aka. the uber rich).
Moreover, addy’s accessibility and simplicity offers a welcome introduction to those new to real estate and investing. Members can decide their risk preference: some investment properties that require few if any upgrades or changes come with a little risk. Those properties calling for a bit more work, such as enhancing amenities, are more opportunistic investments, with slightly higher risk and a longer time frame to yield results, albeit often higher ones.
addy continues to welcome more properties across Canada to its growing portfolio. Among the latest are developments in Toronto as well as Hamilton, with another near Victoria on its way. As younger generations grow frustrated with the Canadian market, addy and its crowdfunding real estate model offers a chance to own property, enjoy gains and glimpse a hopeful future.