📉 40+ Condo Projects in GTA are Facing Construction Delays

• These delayed projects would have added 13,721 new condo units to the market.

• Sales activity in the third quarter was slow, with just 2,664 new condo units sold. This marks the second-slowest third quarter in 20 years.

• Year-to-date presale launches in 2023, at 13,197 units, are down 36% compared to the same period in 2022.

Why This Matters: When developers put their projects on hold due to high-interest rates and slower sales, it leads to construction delays. This delay creates a shortage of condos, which has an impact on the housing market and can affect affordability and market conditions.

🧑‍🌾 The Boom in Ontario's Farmland Market

• High commodity prices due to global instability and low interest rates are driving up the value of farmland in Ontario​

• Ontario farmland is now expected to hit an average price of $30,000 an acre, doubling its value in a little over a decade

• According to experts, the value of farmland has been driven mainly by farmers expanding their operations. Investing in existing farms is more attractive than starting new farms.

• Large institutions have also been buying up farmland over the last decade, but they remain a small percentage of overall farmland ownership

Why This Matters: The surging demand and rising prices in Ontario's farmland market present significant considerations for investors.

The expansion of operations by farmers and the involvement of institutional investors add further demand in the market. Investors need to closely evaluate the potential returns and risks associated with long-term viability, rental income, and the impact on new farmers entering the industry.

💰 60% of Mortgages at Risk of Payment Shock by 2026

• RBC Capital Markets highlights that about 60% of outstanding mortgages in Canada will be coming due in the next three years.

• In 2024, over $186 billion of mortgages are set to renew. The total value of these mortgages due for renewal by 2026 exceeds $900 billion.

• When variable rate mortgages in Canada come up for renewal in 2025, homeowners will face an average increase of 33% to their mortgage payments

• Lowering the average interest rate increase to 20% would require the Bank of Canada benchmark rate to fall to 0.25%

Why This Matters: As interest rates rise, it may lead to an increase in credit losses and financial strain for homeowners, which in turn can affect the performance of mortgage-backed securities and other related investments. Additionally, a diversified portfolio that includes real estate can help reduce overall risk and volatility.

🔥 Hot Canadian REITs for Investors

In our recent newsletter, we discussed REITs. Here's a look at recent updates and the hottest REITs available on the market.

• Canadian Apartment REIT (CAR.UN):

  • Dividend yield: 3.21%

  • Share price increased by 9% in the last year.

  • With over 99% occupancy rate in the Canadian residential portfolio. 

• Granite REIT (GRT.UN):

  • Dividend yield: 4.49% 

  • Share value increased by 6.3% in the last year. -

  • Net operating income (NOI) increased in Q2 2023 due to acquisition activity and developments

• Slate Grocery REIT (SGR.UN): - 

  • Generous dividend yield of 10.91%. 

  • Achieved record leasing activity, driving occupancy and revenue growth. 

Why This Matters: These REITs can provide opportunities for passive income generation, long-term growth potential, and defense against market volatility. This means that for every dollar invested in REITs, investors can expect to receive an annualized return of 2-10% in the form of dividends or distributions.