A number of news items in the past 2 weeks point to continued improvement in the multi-family development rationale we’re following:
- Alberta EI benefit recipients dropped a staggering 34.3% since 2011.
- The feds announced policy measures to drive higher equity among homeowners.
- AIMCo’s Leo de Bever confirms significant returns derive from “alternative investments” including private equity and real estate.
While the drop in unemployment supports the rising demand for housing in Alberta, we are particularly fond of Flaherty’s policy announcement due to its implications for interest rates and the predictable shift toward multi-family home purchases this policy will promote.
It is clear that the federal government does not view interest rate hikes as a viable way to address burgeoning household debt. This serves to lengthen our outlook for continued low interest rates. We expect our investment alternatives will continue to find favour among investors frustrated by low yields and volatility on more conventional investments.
Our conviction is echoed by institutional investors, including Alberta’s pension fund manager – AIMCo, whose CEO recently acknowledged that recent investment returns have been bouyed by alternative investments and that he would prefer to make more private investments within the province of Alberta.
These items, and countless others available in the Market News section of our website, lend considerable support for the strategy of developing local multi-family residential building projects.