Canada’s pressing need for high-density housing and how Equiton is part of the solution

This article was produced in partnership with Equiton

Canada is on the cusp of a housing crisis. With immigration levels expected to hit half a million per year by 2025, the need for housing has never been more urgent. Immigration serves as a key strategy for the federal government to address demographic challenges - from an aging population to declining birth rates. However, the influx of immigrants has further exacerbated Canada’s housing shortage. The Canadian Mortgage and Housing Corp. estimates that Canada needs to build 3.5 million more homes by 2030 than currently projected, to establish housing affordability^[i].

In a discussion with WP, Geoff Lang, Senior Vice-President at Equiton, remarked, “We’re getting shovels in the ground and building up. We believe this will benefit the Canadian landscape.”

Addressing the housing crisis

Urgent housing requirements are not limited to just immigrants. Currently, Canada hosts approximately 800,000 international students, marking a 31% surge since 2022^[ii].

Despite the Greater Toronto Area witnessing a 130% increase in new condominium supply over the last ten years^[iii], the demand remains robust and unsatisfied. Private equity firms, like Equiton, are stepping up, constructing multi-residential buildings that not only enhance local communities but also cater to this escalating housing demand.

Lang details,  Equiton’s Apartment Fund has acquired the Riverain District development project in Ottawa in partnership with Main and Main, this multi-phase project aims to construct over 1,000 multi-residential rental units, targeting Phase 1 occupancy by mid-2025. The project bolsters the already strong Fund, standing as an opportunity for clients looking to generate tax-efficient income; a factor that is becoming increasingly essential in today's financial landscape.

“One of the primary attractions of Equiton’s Funds is the firm’s high-quality acquisition process. This process ensures that we are investing in opportunities that produce consistent returns for our investors while providing great living spaces where our residents can thrive." stated Lang

He pointed, “It's crucial to understand that not all real estate is created equal. Our goal is to serve as the stable asset class within a client's investment portfolio. Our investments in the multi-residential sector have significant potential for growth. This approach is also strategically sound for risk mitigation. Our Funds have consistently produced enhanced risk-adjusted returns.”

Apart from the Apartment Fund, Equiton offers a variety of private real estate investment solutions designed to add to the existing housing supply and responsibly grow the wealth of investors. The Income and Development Fund, gives investors access to institutional grade real estate assets including income-producing (commercial/industrial/lending) as well as development projects like Marquis Modern Towns in Guelph. Upon completion, the development will consist of 96 stacked townhomes.

Equiton also offers exclusive access to its two Toronto developments–Vicinity Condos and Sandstones Condo. Vicinity Condos will introduce approximately 150 residential units to the market. Sandstones Condo, expected to be ready for occupancy by Q3 2027, is set to further bolster the housing supply with over 300 residential units.

Through the Income and Development Fund, investors get exposure to Equiton’s development offerings, as the Fund has a stake in both Sandstones Condo and Vicinity Condos.

“If you want that monthly liquidity similar to our Apartment Fund while desiring more exposure to development projects, the Income and Development Fund can help you maintain monthly liquidity while diversifying your exposure,” said Lang.

Focused on properties in Canadian urban centres, this Fund aims to diversify risk across various real estate classes and offers clients an array of benefits, including cash flow from rental income and interest from loans, as well as special distributions from development projects.

In terms of returns, their ambition is clear and defined: The Fund targets an annual net return of 12-16% over a 10-year period.

Why Equiton stands out

Equiton values transparency and corporate governance where a majority independent board and third-party valuation system ensures accountability for its Funds.  When assessing a development property, Equiton undertakes a thorough due-diligence process. This includes engaging third-party appraisal and cost consulting reports, as well as market studies.

When considering whether to develop versus purchase, Equiton performs an in-depth evaluation. 

“Firstly, we examine the market to determine if it aligns with our strategic goals. Secondly, we assess the financial feasibility of development, ensuring that the cost is lower than what we would need to spend to acquire a comparable asset within the same market. Ultimately, these considerations form the basis of our decision-making process,” said Lang.

As Canada grapples with increasing housing demands, firms like Equiton present a comprehensive, well-thought-out solution. Their diversified approach, coupled with a deep understanding of the Canadian real estate landscape, looks to help address the imminent housing crisis and also offers an attractive proposition for investors.