Mark Kenney highlights the need for regulatory changes and investment strategies to address Canada's housing crisis
In a roundtable discussion with Wealth Professional, CAPREIT CEO Mark Kenney shared insights during a fireside chat with Middlefield, exploring Canada’s housing dynamics and CAPREIT’s investment prospects.
Kenney emphasized the need for provincial governments to adopt a welcoming stance toward businesses to boost investment in the housing sector.
Kenney addressed key issues in Canada's multifamily sector, highlighting CAPREIT's role as a top-10 holding in Middlefield’s real estate funds. Middlefield Real Estate Dividend ETF received a FundGrade A+ award for 2023.
Kenney discussed the significant gap between housing demand and supply in Canada, noting that four to five million new homes are needed over the next seven years. This presents growth opportunities for REITs like CAPREIT.
He also stressed the importance of provincial regulations in fostering investor confidence and eliminating barriers to housing development.
Kenney underscored the need for a multifaceted approach to address the affordability crisis, emphasizing both supply-side measures and effective demand-side strategies. He noted the challenges posed by population growth and lengthy housing development timelines.
Kenney highlighted the impact of immigration on housing demand, pointing out that it takes seven years to build homes for new arrivals processed quickly at Pearson Airport.
He called for unprecedented policy responses to balance housing supply and demand, warning that lowering interest rates alone would not solve affordability issues.
Discussing infrastructure and development, Kenney criticized the ban on foreign investment in condominiums and called for private sector involvement in building municipal infrastructure. He advocated for selling older assets to fund newer, higher-performing properties, improving returns for CAPREIT.
Kenney also proposed selling parts of CAPREIT's portfolio for conversion into social housing, emphasizing its importance in addressing Canada's social housing deficit. He expressed willingness to work with the government and non-profit organizations to achieve this goal.
Finally, Kenney and Middlefield CEO Dean Orrico discussed the impending REIT sector revival. Kenney noted that REITs offer significant capital appreciation potential, which many investors overlook.
Orrico emphasized the importance of investing in REITs before interest rates settle, citing recent merger and acquisition activities as evidence of a strong rebound in the sector.
