Multifamily housing: Trends to track in 2019

Multifamily properties are emerging as an ever-important facet of the housing market. In the early 1990s, multifamily made up a mere seven percent of spending on new residential construction. This share ballooned to 18 percent in 2017, or a growth of over 2.5 times. Here are some trends and predictions on the multifamily segment in 2019.

First, it’s important to look at the growth figures to have a better understanding of multifamily housing, according to real estate expert Ron Cadman. Since 2010, real spending on new multifamily construction projects went up almost four times. In 2017, annual spending reached $62.6 billion, which is 3.8 times the spending in the post-recession setup of 2010. Single-family construction, on the other hand, didn’t recover as much, with real spending on it remaining at less than half the peak level.

While New York City maintains the highest overall multifamily spending, Seattle spends most per capita. Multifamily construction proves crucial to local economies for two main reasons, namely meeting the need for housing via adding new units to the housing supply (thus keeping rent growth within control), and boosting the economy through job creation and spending.

Multifamily will keep attracting all adult segments, although it seems to attract millennials the most. The urban lifestyle appears to keep its charm, where many renters aspire to live in or close to downtown amid financial uncertainty and narrowing housing options. While apartment spaces are shrinking, too, common areas are growing, increasingly becoming designed for social interaction or work purposes.

Finally, personalization seems big in the multifamily segment, adds Ron Cadman. Industry movers are gradually giving tenants better command over their living spaces and their environments as a whole, from entry doors to lighting and heating regulators.

Ron Cadman is one of the directors of Investar USA. He has been an active developer and investor in US and Canadian real estate for over 30 years. Learn more about real estate on this page.