Financial insights on Canadian housing market from real estate expert

 More questions than answers in Canadian housing

Nofel Alam is a seasoned real estate professional with over a decade of experience in sales, finance, and property management. As the founder of Trusted Property Solutions, he offers innovative solutions tailored to meet the needs of property owners and tenants. With a background in banking and commercial lending, Nofel brings a unique perspective to real estate investments.

In a recent interview with Olatunde Mogaji, Nofel shared his insights on the Canadian housing market, its challenges, and the opportunities it offers for immigrants and investors.

Q: Is the Canadian government addressing the housing crisis by building affordable homes or encouraging investment in the sector?

A: The Government of Canada has acknowledged the housing crisis and the urgent need to create more affordable housing. Initiatives like the National Housing Strategy have committed over $115 billion toward affordable housing over the next 10 years. As of September 30, 2024, $57.57 billion has been allocated, resulting in 156,894 new housing units being created or committed.

This strategy has the potential to increase housing supply significantly, provided that immigration numbers align with the availability of these units. In the coming years, with student visas and work permits facing stricter renewal criteria, we may see a more balanced housing market as demand stabilizes relative to supply.

Q: Housing shortages present opportunities for investors, as many immigrants prioritize security and amenities over location. How can the government better facilitate housing investment in rural and suburban areas?

A: Much of the growth in rural and suburban areas can be attributed to developers. While the government can implement various strategies, their success hinges on incentivizing builders and developers through tax breaks and subsidies.

Additionally, improving infrastructure such as transportation and internet connectivity in these regions would make them more appealing to developers, investors, and potential residents. These measures would encourage development outside the Greater Toronto Area core, creating opportunities in underdeveloped areas.

Q: Could renovating unoccupied high-rise buildings help ease the housing demand-supply imbalance and reduce rent or mortgage rates, especially for new immigrants and temporary foreign workers?

A: Renovating unoccupied high-rise buildings for residential use could certainly ease housing pressures, especially for new immigrants and temporary workers.

However, the primary challenge lies in navigating the significant red tape and regulations associated with such large-scale projects. Success would require streamlined approval processes and active collaboration between developers and various levels of government. With proper coordination, these renovations could help address the supply-demand imbalance and reduce housing costs.

Q: Should financial institutions play a greater role in addressing Canada’s housing crisis by offering builder-friendly incentives, especially for rural development?

A: Both the government and financial institutions play critical roles in shaping the housing market. Financial institutions base their lending practices on the Bank of Canada’s rate, which is influenced by government policy. Additionally, all rules, regulations, incentives, and mortgage programs are government-led but implemented by these institutions.

To expand their role, financial institutions could introduce builder-friendly products that incentivize development in rural areas. When combined with supportive government policies, such initiatives could effectively increase housing supply and address regional disparities.

Q: For potential new homeowners, would you recommend purchasing a completed home or making a down payment on a pre-construction property?

A: The choice depends on the buyer’s financial situation, as well as their immediate and long-term needs. Purchasing a completed or resale home provides the advantage of immediate possession. Recent policy changes, such as eliminating the 20% down payment requirement for homes priced between $1M and $1.5M, have increased buyers’ purchasing power while offering stability in a known market.

Pre-construction properties, however, can provide flexibility through staggered deposit structures, allowing buyers to manage cash flow effectively. That said, pre-construction pricing often includes a premium based on anticipated market appreciation. While this can be a great opportunity for equity growth, it carries risks if future market values don’t meet expectations, potentially requiring buyers to cover any shortfall.

Q: As an immigrant in the competitive real estate industry, what sets your services apart and helps you effectively serve your clients?

A: As an immigrant and real estate professional, I entered this industry to offer an empathetic, relationship-focused approach. My success has come from prioritizing my clients’ needs and acting as their trusted partner for all their real estate needs.

I focus on building long-term relationships rather than treating transactions as one-off deals. My clients know they can count on me beyond the sale, fostering trust and loyalty. By combining this mindset with deep industry knowledge, I’ve been able to stand out in a competitive market while effectively catering to my clientele.

(First published on thebusinessimmigrant.com)