So you're correct that the incentive program is mostly for conversions, but Cantiro took advantage of the subsidies for demolition of vacant/underutilized buildings as part of their project, and also are providing some non-market housing. Not sure how these agreements are structured, but I assume that Cantiro would need to pay back the subsidy they received to demolish those old buildings if they decide not to proceed within a certain timeline.
They have received no money for the demolition. They only get the money when the building is done. Otherwise you'd have landowners taking down underused buildings and paving parking lots.
ca.finance.yahoo.com
The silver lining in all this is Trump's loony pronouncements and general unpredictability are having an unexpected benefit in that he's highlighted our overdependence on the US market, and all parties now seem onside with ideas like pipelines to access overseas markets, developing LNG, taking down interprovincial trade barriers, building trade alliances with other countries and other things we should have been working on a long time ago. Unfortunately, I feel like Canada needed a big kick in the ass to start trying to get some of these things done.
Thanks for sharing. I hope you and Desjardins are right. I anticipate that after the election, immigration targets may be adjusted upward for 2026 once the government claims victory in making housing more affordable in 2025. Uncertainty remains a challenge for investors and developers, making it difficult to justify significant capital risk when so many external factors can undermine success. I’m proceeding with a few projects, but my poorly performing crystal ball is telling me to underwrite rents down 15% from where they were six months ago and assume interest rates 25 basis points higher than they are now. With these adjustments, project feasibility is getting very tight. Curious if anybody thinks these assumptions are unreasonable and why?There's also this...
Canada may overshoot population targets, with complications looming: Desjardins
"Our long-term population projection suggests that the government will require more aggressive reductions in NPR numbers."
You can adjust your targets but that's all they are, just targets.
Desjardins estimates the number of new NPRs in Canada was likely down by around 468,000 year-over-year in 2024 — 25 per cent lower than in 2023. It says this was largely due to a drop in new international students of roughly 280,000 (38 per cent).
But despite the drop in new NPR arrivals, Valencia and Bartlett write that “net NPR numbers rose by almost 40,000” by the fourth quarter of 2024 — 100,000 more than both Desjardins and the government had previously forecast, and 140,000 more than numbers modelled by the Bank of Canada.
That first number is "net", and these numbers also don't factor in the fact that people whose time has expired actually leave.
I'm no economist, but I would think that projects of this scale would consider the market over a longer period of time then just the next year or two, no?
Yes, long-term trends are considered but if a project doesn’t make financial sense in the first couple of years it’s very risky to proceed based on the hope that rent growth will outpace expense growth.
I guess I'll give a lame answer and say it depends on where in the project lifecycle you are. If it is early days, I move forward but if you're looking a breaking ground I would hold off. There is going to be whiplash in the first year of trump and the first year of a new canadian government. By the end of this year there will be a better read on the next three and you should be able to do some more reliable forecasting. That year, 2026 there are US midterms, which will be another big shift and adjustment. It is one thing to diversify off the US but that will take decades so they really stir our drink.
