Ongoing customer engagement shows us how more Canadian property managers and landlords are turning to technology to streamline their operations and adapt to a changing macroeconomic environment. The residential property management market continues to face constant shifts – inflation, increased mortgage qualification hurdles, looming rate hikes, and plans to welcome a record number of newcomers in the coming years. In spite of these complications, Canada is set to maintain a high demand for homes and, in turn, an increased demand for property management services.
Low interest rates are also leading to greater numbers of people buying properties. This demand means more transactions, more investment properties, more people on the move, and more people needed to manage it all. All of this will ultimately increase the need for and put pressure on property managers.
Covid-19 adds another factor to the mix, creating additional challenges for property managers to navigate. As we head into the third year of the pandemic, we continue to encounter inflation, supply chain woes, labour shortages, and shifting demographics. It can be hard for landlords and property managers to know where to aim their focus.
Our latest Residential Property Management Trends Report looked at these and other trends that are affecting the industry today. Some of these may already be impacting your business, and understanding them will help you take a more proactive approach this year and beyond.
Debating the existence of a bubble & shifting population demographics
The lingering speculation of a looming property bubble – and even its existence – has been of much debate and has much to do with the rising housing prices in Canada, especially in larger cities like Toronto and Vancouver. The Canadian Real Estate Association reported that in 2021 alone, house prices rose by an average of 14%. Alongside the continuation of remote work among many Canadian businesses, population dynamics within the core areas of cities have shifted. With an increase in city dwellers moving outward towards the suburbs, leading factors like affordability and increased spatial proximity have become a top consideration for Canadian residents.
Whether you believe there is a bubble or not, it is important to note that home prices are divorced from the fundamentals, meaning that people are bidding based on their emotions, not market valuations, so it is important to continue to remain aware of this as the market evolves. As landlords and property managers continue to adapt to the changing macroeconomic landscapes in cities across Canada, the rental market also sees recovery upon the horizon.
Managing a property during a pandemic: A gradual recovery with onset costs
2020 saw record numbers in unemployment, rent freezes, and property bans. Managing property and its costs during the pandemic has been especially challenging for landlords. As these costs gradually lift, the prospects of recovery are still proving to be a challenge for landlords. High inflation rates do not make things easier. Covid-19 led to high inflation rates for many countries, with Canada reaching a record at 4.7% in October 2021, the highest since 2003, according to Trading Economics. With high inflation comes increased costs, which will remain high even as the pandemic lifts and recovery ramps up.
Introducing a strategy for enhanced technology
Teams who take a proactive approach often look to include tech-enabled strategies to help with the management of day-to-day activities. Meeting your team’s needs starts with developing a plan to understand the opportunities to improve processes, morale and retention, and introducing tools that can noticeably improve performance. Increasing the level of openness for tenant feedback can help you and your team understand their needs better, contributing to not only their overall tenant experience and satisfaction, but also your reputation as a landlord and property manager.
Ultimately, a plan is better than no plan. In the event of future (and unexpected) delays, disasters, or pandemics affecting the global supply chain, anticipating expenditures and developing plans to build in extra financial buffers can help prevent future financial headaches and other issues. As the supply chain shortages cause prices to fluctuate, proactively engaging your vendors in pricing discussions can help consolidate your spending across different aspects of your portfolio.
Considering the varying factors impacting the industry, resilience as a property manager is not the only solution; modern technology can help teams streamline internal operations and deliver an outstanding experience for residents. We see the increasing need for property managers and landlords to centralize their processes and management systems with tech-enabled solutions, for everything from accounting to maintenance requests. Software solutions like Propra help property managers become better prepared and more resilient by using technology to communicate with residents and manage properties.
To learn more about these market predictions and the notable changes that will have the greatest impact on your business as a landlord, property manager or asset owner, read The State of Canadian Residential Property Management Trends Report.