Housing for Older Canadians: Analyzing the Feasibility of a New Development

OTTAWA, ONTARIO--(Marketwired - April 3, 2014) - When planning a housing development aimed at older Canadians, one of the most important considerations to keep in mind is whether or not there will be sufficient demand from target markets to make the development financially feasible.

To help developers and sponsors determine if their projects are feasible, Canada Mortgage and Housing Corporation's (CMHC) Housing For Older Canadians: The Definitive Guide to the Over-55 Market outlines four key analyses that should be completed before deciding whether or not to break ground on any new development:

• Market analysis: A thorough market analysis can identify untapped opportunities and shape an effective strategy for attracting the target market. The first step is to define the market area. Next, the size, living arrangements and other characteristics of the target market residing within that area must be assessed. The data collected through this research can then be analyzed and compared to reveal the preferences of potential future residents.
  
  
• Site selection and analysis: If market analysis shows that sufficient demand exists, the development site must then be analyzed according to factors like price or value of the land; location and neighbourhood; zoning, servicing, physical condition, size, shape and potential for working with local partners; and any applicable municipal fees, charges or incentives.
  
  
• Competitive market analysis: Once the site is selected, an analysis of the competition can reveal whether or not the housing that already exists within the market area meets the financial, social, recreational, service and lifestyle needs of the residents.
  
  
• Financial feasibility analysis: Last but not least, the results of each of the previous studies can be combined to evaluate whether or not the proposed project can be delivered within a price range the market can afford, over the period of time it will take to plan, develop, construct and occupy the building or the time it takes to sell off all of the units. This can be determined by a detailed comparison of costs and revenues using a tool known as a financial pro forma.
  
  

For more information

Download a free copy of Housing for Older Canadians: The Definitive Guide to the Over-55 Market, visit our website at www.cmhc.ca or call CMHC at 1-800-668-2642. For over 65 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada's national housing agency, and a source of objective, reliable housing information.

Terms and Conditions of Use of CMHC Ready-to-Use Articles

The use of Ready-to-Use Articles is governed by the Terms & Conditions set out on the Ready-to-Use Articles section of CMHC's website. Information in this article may be published in its present form and must be attributed to CMHC. Authorization to publish an article granted by this agreement is valid only for a period of one year as of the date of the creation by CMHC of that article and notwithstanding the date on which you published that article.