The multi-suite residential and industrial property categories were robust performers last year and are expected to lead in 2021, according to the Canadian Economic Outlook and Market Fundamentals Report, from real estate and property management firm Morguard Corp.

“The outperformance of industrial and multi-suite residential assets was driven in part by relatively stable rental fundamentals, boosted by demand for warehouse and logistics space and government transfer payments to renter households, respectively,” says Keith Reading, director, research at Morguard.

Healthy investment activity

Despite the uncertainty surrounding the effects of COVID-19, investor confidence in the multi-suite residential segment was maintained, resulting in the segment’s healthy investment activity levels following the trend seen over the past several years. Reduced rental demand resulted in increased vacancy compared with the pre-pandemic record lows reported in several cities and submarkets. The segment is expected to experience a steady recovery in tandem with the anticipation and distribution of a COVID-19 vaccine that will ease restrictions for physical distancing, and as a result, boost rental demand.

Efforts from the federal government and Canada’s central bank to support Canadian households and businesses during COVID-19 led to an economic rebound from the historic decline at the beginning of 2020. Meanwhile, the Bank of Canada implemented cuts to the overnight interest rate to offset the negative impacts of the pandemic on Canada’s businesses and consumers. These measures bolstered consumer confidence levels, resulting in increased levels of spending during the summer and early fall of 2020.