#canada real estate
Survey Says: 2014 Expected To Be A Big Year For Canadian Real Estate
Canada s real estate market will defy its naysayers in 2014 with robust performance that continues to tantalize domestic and international investors. So concludes the report Emerging Trends in Real Estate 2014. which was authored by PricewaterhouseCoopers and the Urban Land Institute.
“Canada’s real estate market avoided the worst of the 2008 global financial crisis, and due to steady economic growth and a lack of oversupply it remains in a good position,” the report notes. “The current level of economic growth will support the expansion of the real estate market across all property types.”
Although the average “buy” rating in 2014 is projected to slip from “modestly good” to “fair,” the authors believe this is indicative of a strengthening market that has pushed up prices in the previous two years, causing investors to “approach each transaction with a heightened level of caution.” They note, however, that projected growth will depend in part on a continued recovery of the U.S. economy, with Canada poised to benefit through mutual trade and investment, including investment in U.S. real estate.
The study found that competition for capital in 2014 is expected to be fierce, as the availability and cost for capital real estate investment are “coming more into balance.” Indeed, equity capital is considered by more than 38 percent of survey respondents to be in balance, up from 32 percent in 2013. Also, only 37 percent of respondents believe that available capital is oversupplied, down from 50 percent two years ago:
Among the major trends forecasted for 2014 is a continued push toward urbanization in major cities, which will fuel redevelopment, including retail, and a rise in mixed-use development in downtown areas. Real estate in suburban areas will feel the brunt of reverse migration as more individuals and companies move from the suburbs into downtown areas.
In what may or may not be good news, the study found that “Canada is in the midst of a commercial office boom,” with Vancouver and Toronto leading the charge. As such, prices are expected to remain high in 2014. But while new construction is booming, concern about vacancies in older buildings has tempered the enthusiasm of many. The result: 25 percent of respondents believe 2014 will be a good time to buy commercial office property, and 26 percent believe it will be a good time to sell.
The study also notes that housing will continue to be a major focal point in 2014, as “Rising housing prices will put more focus on how the nation can continue to provide enough affordable housing to a population base fueled by strong immigration.”
The 35th edition of this trends and forecast publication aggregated the views of more than 1,000 real estate industry experts who either completed surveys or were interviewed for the study.