Real Estate News
Canadian Real Estate Mainly Strong In 2005
The Canadian economy gained momentum in 2004 that promises to roll on through 2005. Reports from Canadian real estate sectors reveal their activity during last year should be reflected in solid performance this year even though local variations may occur. Colliers International reports that Canadian real estate investment sales volumes for the first half of 2004 totaled $8 billion, which is the strongest reported figure since the first half of 2000. This increase was driven by Toronto, Moncton, Halifax and Saskatchewan. The balance of Canada saw declines in volume, but strong activity. For 2005, Colliers anticipates "strong demand for Canadian real estate as the stability and attractiveness of returns will not change materially." Toronto"s trouble-plagued economy rebounded in 2004 with 5.1 per cent growth in its gross domestic product. Forecasts call for continued strong growth of 3.8 per cent in 2005. The 2004 office market posted positive gains downtown and in the suburbs while Toronto"s Finance, Insurance and Real Estate (FIRE) sector expanded by a remarkable 8.1 per cent -- a dramatic increase not expected to be repeated this year. Even in less active markets, the outlook is solid. After almost three years of high vacancy, Colliers" "Vancouver Office Market Report - Q4 2004" suggests downtown vacancy is on the decline with over 475,000 square feet of space absorbed. Although this represented 70 per cent of BC"s office leasing, the office market is on the rebound across British Columbia"s Lower Mainland with some of the recovery attributed to Olympics-driven expansion of Vancouver"s rapid transit system. The Canadian federal housing agency, Canada Mortgage and Housing Corporation (CMHC), reports that new residential construction finished 2004 on a strong note, however, sales of existing homes through MLS® gradually declined over the weeks since March 2004. This trend supports CMHC"s view that "the level of activity in the housing market will begin to slow in 2005. Housing starts will decrease 9.8 per cent to reach a robust 210,200 units in 2005." Sales of existing homes are expected to fall as well, but CMHC still maintains that 2005 will be the second most active year on record for MLS® sales. Canada also has vulnerable real estate sectors that face questionable gains this year. Market researcher Ipsos-Reid"s recent "Canadian Farm Trends Report" discloses that commercial farmers continue to believe the agriculture economy is weak. Encouragingly, their outlook for agriculture reportedly showed some signs of increased optimism, particularly in Alberta and among beef producers across Canada. Unfortunately, this new-found optimism may be short lived in light of the recent discovery of new cases of BSE. Canadian economic growth is projected to surpass the US growth rate despite interest rates, which are expected to rise moderately based on low inflationary risk. This pattern should translate into rising Canadian property values and strong real estate leasing fundamentals.RES Course Provider commented:
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27.03.2012