Why Invest in Canadian Real Estate in 2024?

Is It Still a Good Bet?‍

As 2024 unfolds, real estate in Canada has both opportunities and challenges. With interest rates rising, the landscape for investors is different from what it was just a few years ago. Whether you’re considering your first investment or are a seasoned pro, understanding today’s market is crucial.‍

“Canadian families are owning more homes and living in them, rather than using them as investments.”

‍The trend in 2022 data shows more Canadians occupying their homes, a shift from the investor-heavy market of previous years. Nova Scotia, Ontario, B.C., and New Brunswick have all seen increases in owner-occupied homes.

What Changed?

1. Interest Rates Skyrocketed
Between 2022 and 2023, interest rates jumped dramatically, climbing by over 300%. This sudden rise hit investors hard, shrinking cash flow and pushing many out of the market. While low rates fueled a buying frenzy in 2020-2021, the current environment is less forgiving.

2. Fewer Investors, More Homeowners
More Canadians are now living in their homes rather than renting them out. High interest rates and government regulations, such as anti-flipping rules and restrictions on Airbnb rentals, have further deterred short-term investors.

Real Estate Investing Today: Is It Still Worth It?

“Real estate as an investment works when there’s synergy between the landlord and the tenant.”
Even in a tougher market, real estate can still be a smart investment. The key is to play the long game, understand your market, and avoid the temptation of risky, quick flips. Rentals continue to be a solid option as demand remains high, especially in provinces with growing populations.

What You Need to Know

1. Be Strategic
Gone are the days of jumping into real estate blindly. You need to analyze properties closely, factoring in cash flow, market trends, and your personal risk tolerance. The market isn’t as forgiving as it was during the low-interest-rate era.

2. Know Your Risk Profile
How comfortable are you with potential market changes? Can you handle the ups and downs of being a landlord? Understanding your financial and emotional limits will help you decide if real estate is the right investment for you.

3. Focus on Long-Term Gains
Rental rates are rising steadily, even if property appreciation isn’t as explosive as it was a few years ago. Long-term rentals and slow, thoughtful property improvements can still yield great returns.

Takeaways

Real estate investing in Canada is evolving. Higher interest rates, government regulations, and market changes have reshaped the landscape. While it’s not the easy win it was in 2020, it can still be a valuable, long-term investment—if you play smart. Ask yourself the right questions, do your research, and know when to hold or fold.

“We’re going to have real estate as an investment as long as time goes on.”