Canadian commercial real estate surges
Commercial property thrives as residential market slows.
BY Caroline Cakebread | October 17, 2012
Commercial real estate in Canada is turning into a hot property at the same time as warning signs abound about the country’s slowing residential market. According to the RE/MAX Commercial Investor Report, almost all markets in Canada saw an increase in commercial sales and dollar volume over the six-month period ending June 30, 2012. Canadian and foreign investors are behind the push, buying apartment buildings and small strip malls. Motivated by continuing low interest rates and a generally bullish tone for the Canadian economy, investors are looking to boost their allocations to commercial real estate in Canada. Private investors, in particular, have gained a serious foothold in recent years, spurring demand for entry-level properties such as multi-unit residential, suburban and urban retail storefronts, and smaller office buildings.
“Given the appetite for tangible investments with long-term revenue streams and potential for appreciation, commercial real estate has been gaining favour and is expected to be a top-performer well into the new year,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Despite the enthusiasm, demand is unlikely to be satisfied while those same benefits are prompting owners/landlords to hold on to their properties, especially with the prospect of capital gains taxes down the road. It’s a push-pull situation, yet buyers are forging ahead, hoping to ride the wave of year-over-year double-digit equity gains a little while longer.”
Read the full news release here.