LOS ANGELES—“Vancouver is heavily influence by mainland Chinese investors both in commercial and residential real estate.” That is according to Mark Fieder, principal and COO of Canadian operations for Avison Young. It is driving prices higher, he said at a recent AY annual meeting here. “Vancouver is the gateway for Canada for Pacific Rim trade movement.”
In Calgary—being the energy centre for Canada—the collapse in oil prices is causing major economic shift at a time when the real estate development cycle has been strong, Fieder explained. There will be a tough 12 months ahead. “Layoffs have been swift.”
Alberta needs pipelines to move product to the West coast, Eastern Canada and US markets, he said. And not helping the situation, according to Fieder, “is the new socialist NDP provincial government which is breeding indecision with many investors and corporate decision-makers. Canada needs Alberta back on stable footing (the East is not immune).”
Saskatchewan and Manitoba will also be hurt by the drop in oil prices, he adds, “but their respective economies are now diversified enough to dampen the economic malaise.”
But the greater Toronto area (GTA) continues to grow. “It is Canada's largest city at 6 million in population and is the financial centre of the nation. Toronto is possibly the most multicultural city on earth, with people from 230 different ethnic origins; more than 50% born outside Canada—49% are visible minorities.”
The GTA is also the preferred stepping off centre for immigrants, absorbing anywhere from 30% to 40% of all immigration, currently running at close to 100,000 people per annum, he added. “House prices continue to rise with the average detached home commanding $1.15 million in the City of Toronto, $635,000 in GTA overall. The love for condos continues with 27,900 units completed YTD in 2015.”
Both Ontario and Quebec's manufacturing sector growth is accelerating as the low Canadian dollar is helping with exports, Fieder noted. “Unemployment in both Provinces is expected to decline starting next year. Diversified employment including aerospace, life sciences, banking, professional services and general manufacturing will lead growth.”
Atlantic Canada is growing as well. “Halifax has strong links to offshore natural gas exploration and production. Work is starting this year on the $26-billion multi-year Navy shipbuilding contract, a major boost to manufacturing and construction industries. Halifax is also the transportation, warehousing, wholesale and retail trade hub and all sectors are expected to lead growth in 2015.”
Overall, Fieder said that Canada's commercial real estate sector is on excellent footing. “The office, industrial and retail sectors have a reasonable balance between new development and the demand for product,” he said.
“Calgary is the exception and will have a challenging 2016, he said. “There, the impact on demand for commercial space due to the drop in oil prices is compounded by the delivery of a significant amount of new development. Supply and demand is out of sync and will take some time to come back into balance.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
