Property Management is Forecast to Grow as Condo Market Share Grows
We are nearing the end of a transitional 2022, looking for positive signs of better days to come. Every year at this time, banks, policy institutes and other think tank organizations release their economic forecasts for the upcoming year. Among these, a number of real estate industry players released reports that are favourable to growth in the property management industry. Property management is a broad industry and includes rental apartments, industrial and institutional facilities, as well as residential condominiums.
The 2022 Canadian Condominium Report, prepared by RE/MAX Canada, looked at six major centres that included Greater Toronto and Ottawa, Greater Vancouver, Calgary, Edmonton and Nova Scotia. Even with rising interest rates, condominiums are still viewed by many homebuyers as a more affordable option than single-family housing in most markets. One of the main highlights from the report found that as a percentage of total real estate sales, condo market share has grown. While there have been fewer condominium sales in 2022, prices for condos in most major markets remained stable or have risen. Some homebuyers are opting to rent in the condo market in the meantime.
An RBC Special Housing Report supports this outlook. The RBC report states single-detached home prices are below 2021 levels. “Condo prices, however, are holding up better—still up 13%-18% from one year ago for the most part. Demand for more affordable options like condos remains relatively strong.”
With homebuyers continuing to embrace a condominium lifestyle and condos viewed as an affordable home owner’s option, it is easy to see how Canadian condominium property management will benefit in both the short and long term.
Condo Property Management Growth
Growth in property management in Canada is expected to occur in all aspects of the industry. According to ibisworld.com, an international market research and reporting organization, the property management market in Canada is approximately $9.5 billion in revenue in 2022. Ibisworld.com predicts the Canadian property management market will increase by 4% by year end. On average, this market has grown 3.4% per year since 2017.
Provincially, in Quebec in 2019, Montreal’s prestigious McGill University launched a Professional Development Certificate in Residential and Condominium Property Management to address the complex nature and anticipated growth in property management in that province.
Looking closer to home at the condominium industry in the province of Ontario, we can see condominium property management has experienced consistent growth in the recent past. The following statistics from the CMRAO and CAO confirm the upward trend in condominiums in Ontario:
- More than 50% of new homes being built are condominiums (Source: CMRAO)
- The number of condominium corporations in 2021/22 was 12,320 and 12,120 in 2020/21 (Source: CAO); this number was 11,557 in 2019 (CMRAO)
- Growth in Ontario’s condominium sector has outpaced the number of people embarking upon a career in condominium management (CMRAO)
- According to the CMRAO annual report for 2020/21 the number of active licensees was 4,351 (a 12% increase from the previous year)
- The number of licensed companies is 404 (CMRAO)
Benefits of Growth
As the property management industry in Ontario continues to grow, the demand for licensed professional managers keeps pace. Over the last 24–36 months, managers proved their worth to their boards of directors and unit owners by showing up and being creative during difficult times. When condo property managers were declared essential workers in 2020, they had to adapt to and implement COVID-19 practices and protocols to keep their communities safe. Almost all managers adopted the use of new technologies to power through the pandemic and continue to manage properties safely and effectively.
A thriving condominium property management industry produces important benefits for stakeholders. It results in strong, engaged entrants starting up property management companies and employed as condominium managers. More human capital means more candidates and more choices. There is more interest from students, graduates, people in job transition and others in pursuing property management as a career. With the mandatory licensing requirement to operate as a condo manager and a condo management company, this implies higher standards as well as consistency across the board. As a result, all stakeholders stand to gain from consistent condo management growth, a roster of professional candidates and a healthy industry.