Real Estate Investments In Victoria

Advantages of investing in real estate can include the ability to generate wealth, build equity and hedge against inflation. There are three main sources of return from real estate: net rental income, debt reduction (as the mortgage is paid down), and growth in value as rental income and property values increase over time. Real estate tends to be a very stable asset class that delivers reliable rental income and tax-efficient long-term growth.

In 2021, the rental market in the Victoria Census Metropolitan Area (CMA) returned to relatively tight conditions seen pre-pandemic with the vacancy rate declining from 2.2% in 2020 to 1% in 2021. Average rents increased by 3.1% but the turnover rate declined from the previous year and Victoria can expect to see sustained low turnover in the future. The purpose-built rental apartment universe expanded by 2% or 660 units as rental completions increased 10% compared to 2020.¹

According to the 2021 Census, between 2016 and 2021, the population in Victoria grew 7.1%.² The 2021 Canadian Housing Survey reported that the growth of renter households more than doubled the growth of owner households (21.5% compared to 8.4%). Adults under the age of 75, but specifically individuals aged 25 to 29 years, were less likely to own their home in 2021 than adults in that age range a decade earlier (36.5% in 2021 vs. 44.1% in 2011). Recently built dwellings are increasingly likely to be occupied by renters—40.4% of the housing built in the five years ending in 2021 was tenant-occupied.³

Between July 2020 and June 2021, there was a net inflow of over 34,000 people to BC, including many post-secondary students returning to campuses. Victoria CMA added 5,600 jobs between January and November 2021, with 80% being full-time employment. A combination of stable employment prospects, the persistent gap between the cost of homeownership and renting, and population growth is expected to generate sustained demand for rental housing, resulting in below average long-term vacancy rates. Market demand and favorable development policies for purpose-built rentals are supporting the construction of an expanded and updated rental stock in the Victoria CMA.  For these reasons, Alitis views the Victoria CMA area as a stable market.

Alitis is actively investing in the local market through partnerships with experienced developers and have projects that are in different stages of development including pre-construction (zoning or permitting), under construction, and buildings that are now completed and income producing.