Canadian REITs rallys to new high in 5 years

May 7, 2012

Canadian real estate investment trusts have rallied to the highest levels in five years as rising occupancy and investor demand for yield outweigh concern the Bank of Canada will raise interest rates to cool the market.

Real Estate Trusts Surge Near Five-Year High

The investors in properties from shopping centers and office buildings to rental apartments have benefited as the 10-year Canadian bond yield fell by more than half, boosting the value of their holdings.

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Are Fears of Imminent Drop in Canadian Housing Prices Overblown?

February 29, 2012
• For several months now, various analysts have expressed fears regarding the residential real estate sector in Canada based on ratios of house prices to income or rent. In our opinion, these analyses do not paint a correct picture of the situation in that interest rate levels were not taken into account.
• The recent advance in house prices in Canada is due to recordlow interest rates at a time when the labour market has registered one of the best performances among the advanced countries since 2007. What’s more, Canada’s demographic profile is playing in favour of the housing sector given that the cohort of first-time homebuyers is presently growing at one of the fastest rates among the advanced countries.

Avison Young – Canada Commercial 2012 Forecast

February 10, 2012


Leasing activity was strong across Canada’s office markets in 2011, with vacancy rates decreasing and rental rates trending upward in most markets nationwide. Canada’s overall office vacancy rate has declined steadily from 9.2% at the depths of the recession in 2009, to 8.3% in 2010, to 7.6% in the closing months of 2011 – solidifying the recovery.

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Avison Young – US and Canada Market 2012

February 10, 2012

Cautious optimism to guide Canada and U.S. commercial real estate markets in 2012; solid fundamentals abound in Canada, while U.S. looks for stability

Benefitting from strong fundamentals, Canada’s commercial real estate markets continued to enjoy stability and growth in 2011 despite global economic uncertainty. Meanwhile, the United States suffered from ongoing uncertainty, with limited good news concentrated in a few select markets.

Each country has its risks and concerns, but better days should be ahead for both as the world deals with its financial issues.

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Bank of Canada – Cautions Real Estate Price at Elevated Level

June 27, 2011

Readers may download the entire report from Source: Bank of Canada.  A few worth-mentioning points:

– A home purchase triggers the biggest liability most families will ever take on.  The value of housing-related debt in Canada has nearly tripled over the past decade to $1.3 trillion.  This debt is also the single largest exposure for Canadian financial institutions, with real estate loans making up more than 40 per cent of the assets of Canadian banks, up from about 30 per cent a decade ago.

– Financial vulnerabilities have increased as a result. Canadians are now as indebted (relative to their income) as the Americans and the British (Chart 9). The Bank estimates that the proportion of Canadian households that would be highly vulnerable to an adverse economic shock has risen to its highest level in nine years, despite improving economic conditions and the ongoing low level of interest rates.5

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Vancouver Ready to Burst?

June 20, 2011
The Vancouver real estate market has been the subject of much debate in recent years, but what’s not in dispute is that homes in this west coast city are dramatically over-priced. While Canadian house prices have more than doubled in the last decade, Vancouver’s have more than tripled.
Consider that the average national house price of $373,000 is 5.1 times the annual median family income, while the average Vancouver house price of $815,000 is 11.2 times median family income, according to BMO Capital Markets’ report A Tale of Three Canadian Housing Markets, published June 7.

That means the average house price in Vancouver is 71% more than the average in Toronto.  This growing unaffordability has made Vancouver the third least affordable city in the world, according to a Demographia survey, which looked at 325 markets across the globe.

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Avison Young releases 2011 commercial real estate forecast for U.S., Canada

February 24, 2011

CHICAGO – Commercial real estate markets across Canada experienced moderate-to-strong recovery in 2010, and some markets performed better than expected. In the U.S., select markets improved while broad recovery remained elusive.  Historically, Canadian markets tended to lag U.S. recovery by a year. But in 2001 and again in 2010, Canada led the U.S. in terms of recovery and the patterns of recovery followed the same trajectory.

These are some of the key trends noted in Avison Young’s 2011 Forecast, released today. The annual report covers the Office, Retail, Industrial and Investment markets in 17 regions: Chicago, Washington DC, Atlanta, Houston, Boston, Vancouver, Calgary, Edmonton, Lethbridge, Regina, Winnipeg, Mississauga, Toronto, Ottawa, Montreal, Quebec City and Halifax.

“The Canadian picture remains positive. But the bottom line is this: without improved confidence and growth in employment, consumer spending, industrial production and gross domestic product (GDP), the North American commercial real estate market as a whole will have a difficult time recovering,” comments Mark E. Rose, Chair and CEO of Avison Young.

Read on for Summary or download the report here.

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