Written by Omid Jalili
Although the Canadian economy continues to be a beacon in an otherwise dismal financial outlook internationally, new reports are suggesting the Bank of Canada is feeling the drag from the general global sluggishness. In fact, Canadian economists have downed their expectations for policy rate increases through most of next year. That might not be generally thought of as a good thing in terms of an economic rebound, but for now it spells decent news for real estate. Read on.
Toronto-Dominion Bank’s TD Securities unit in Toronto sees the trend developing whereby the rates will be lower for longer. There are two international drivers here including the downgrade of the US debt by Standard & Poor’s and of course the debt crisis in Europe that continues to rear its ugly head.
However, the commercial real estate market in Toronto doesn’t seem affected according to some of the reports that are surfacing. Primecorp Commercial Realty Inc. has in fact released numbers stating it is increasing and strengthening its Toronto base of operations. There is more good news on the residential real estate scene as well. CMHC reported earlier this week they don’t foresee a price correction for the Canadian market at least this year. Lower mortgage rates and other factors like immigration and employment numbers will be able to buoy up the prices at least for now.
The CMHC predictions are resting on the fact that mortgage rates will stay low for the rest of this year and then start the gradual climb that was already expected in 2012. In another related development, the recent RBC report on the affordability of homes says that while the numbers in terms of price might be up nationally. the affordability in most markets remains good although there is some concern about a few locations like Vancouver.
Written by Masoum Jalili
There are reports the Toronto commercial real estate investment market is set to make a big comeback after struggling through the recession and recent hard times. Sales volumes and solid market fundamentals are all pointing to a record year in 2011. For example, $4.5 billion in commercial real estate was bought or sold in the first half of 2011. You need to look all the way back to pre-recession times for those kinds of positive numbers in the first half of 2007.
The attraction seems to be all about stable assets and is clearly another benefit of the relatively stable banking sector we enjoy in this country. In fact, there are even rivals in the commercial real estate market willing to outbid the competition in an effort to cash in on the stable scene this country offers. Case in point. The Metro Toronto Convention Centre complex was just sold to the Oxford Properties Group Inc. after some jostling from a surprising number of buyers.
There’s even more good news for the commercial real estate scene. Jones Lang LaSalle in Chicago ranked Toronto number three globally for investors. We’re only behind London and New York.
There are other noteworthy trends developing in the residential scheme of things as well. David Foot is an author and his book Boom, Bust & Echo, details how Boomers are now selling their homes in the bigger cities to move to smaller towns where they can enjoy their retirement. Windsor is one of the first cities mentioned and there are even plans to develop another bridge to the United States there. These plans are helping some of the communities that were hit hard by the loss of manufacturing jobs and such. According to some reports, the Boomers have prioritized access to water and health care as the most important attributes they are looking for.
Written by Morteza (Morty) Sadeghi
There’s some good news to be had concerning housing starts and the numbers for July show a 4.3% climb that has some of the experts in the field pleasantly surprised. The numbers start the third quarter off on a positive note as these starts are always an indicator of the strength of the economic recovery.
CMHC reports that starts rose to a seasonally adjusted annualized rate of 205,100 units and numbers are up from the forecast 196,600 units in June. Peter Buchanan, senior economist at CIBC World Markets noted the rise seems at least in one way to contradict the market turmoil of late and the vulnerability that purchasers should be displaying given these recent events.
The contradiction is made all the more interesting by the fact the housing market is generally thought to be one of the major drivers to help an economy out of recession and while ours is acting positively, the American recovery continues to struggle with a weaker version. The National Association of Home Builders said Monday the bleak out look for the American homebuilders market would continue since the index measuring the mood among them is still unchanged at 15 with a score under 50 reflecting a negative outlook. Those numbers from south of the border have been negative since April 2006 which was the middle of the housing boom.
In related news, the turmoil that has been caused by market problems in both the United States and Europe has forced the Bank of Canada to put their planned interest rate hikes on the back burner yet again. The manner of trading that has been going on indicates there might not be an increase before the end of the year and quite possibly into 2012.