Slow but steady growth driving 2011 real estate market
Vancouver has been “bumped” from its spot as Canada’s top real estate market, but that does not mean it is in a slump.
According to PwC’s 32nd annual Emerging Trends in Real Estate report, which interviewed and surveyed nearly 900 real estate experts, investors, developers and brokers in Canada and the U.S., Toronto is now the nation’s top real estate market thanks to continued interest in apartments and industrial properties.
But out west PwC said Vancouver’s office and condo markets are expected to “defy logic” and remain “red hot” in 2011.
“Many wealthy Asian investors park money with plans for eventual citizenship,” the report predicted. “Institutional investors control the relatively small office market, which enjoys minuscule vacancies. Vancouver’s natural barriers control development and attract investors – a powerful combination.”
But the crux of the report, released Tuesday, is that the outlook for Canadian real estate markets in 2011 is “decent” as long as the slow-to-recover U.S. market does not impact growth.
PwC said Canada’s relatively strong banking sector and employment recoveries have bolstered confidence that Canada can escape issues faced in the U.S.
Still, rising interest rates and tight bank requirements have tampered recent buying spurts, and real estate experts surveyed in the report believe “it is a good time to buy, but do not want to sell.”
That means Canadian real estate investors might be more active in the U.S. in 2011 where low prices could mean higher yields.
Meanwhile, respondents also listed apartments and underperforming infill retail or commercial space as the best investor bets in Canada next year.