2024 Outlook for the Church Property Market
As we embark on a new year, it's essential to examine the trends and projections shaping the church property market in 2024. The real estate landscape for religious institutions continues to evolve, influenced by demographic shifts, economic factors, and changing societal norms. In this blog post, we'll explore key insights and predictions for the church property market in the year ahead. To project what the year will look like on a macro level, let us first look at the micro influences of the church market.
Interest Rates: The headline for the past few years has been regarding interest rates and for churches it is no exception. The majority of church buyers are needing commercial financing nowadays with interest rates not having mercy on many. Most major bakes are projecting a start to a downward curve on interest rates starting in Q2-Q3 this year. This will help in bringing up the price ranges for potential buyers and putting more pressure on the limited supply.
Development: With approximately 50% of all institutional property sales selling for redevelopment purposes, the trend of new developments directly impacts the values of church properties. Even for the church properties with a highest and best use other than development, land prices are still driven by the surrounding activity. It is not rare nowadays for a church to pay development prices in order to preserve a church use on a property. Overall, development is expect to increase in pace in 2024. This will be an influence to continue observing as the year goes on.
Supply: A limited supply of institutional properties on the market has always been a double edged sword throughout the province. It is always encouraging to see few churches available for sale as it is providing a hopeful view to the attendance and need of the buildings. However, there is always a need to sell church properties whether that is for growth or to downsize. Overall, I do not expect an influx in the market of institutional properties which will leave more demand for those properties that do come available.
Economy: It may seem strange to think the economy would have a direct impact on church values but it does. One reason is to realize the correlation between the economy and giving through donations to churches. The number of donations directly affects the purchasing ability of church groups. The economy also affects church property values due to potential buyers wanting to use the properties for alternative uses such as for a daycare.
Interest rates, development, supply, and economics all play a part in influencing the market outlook for church properties in 2024. Church properties are always evaluated on a case-by-case basis which makes a broad market projection difficult. However, the micro influences do point to a continued increase in church property values in the coming year.
Whether looking to buy, sell, or lease a church space this year, contact me to discuss your options further.