Cautious attitude helps Canadian housing market in 2009
Ottawa Business Journal
The Canadian real estate market will be shielded in 2009 by the more cautious behaviour exhibited by industry players compared to those in the market south of the border, with Vancouver ranked as the city to watch for real estate investment, according to a new PricewaterhouseCoopers and Urban Land Institute report.
The report said it’s currently a “moderately good time” to sell property, with western provinces boasting the strongest growth trends and lowest vacancies in North America.
“U.S. housing woes haven’t extended to Canada, where banks and regulators have managed the excessive mortgage lending practices of our neighbours to the south,” said PwC partner Frank Magliocco in a statement. “Property markets, including housing, track at or near equilibrium, with high occupancies and controlled development. We always get caught up in U.S. trends, but given our strong fundamentals they shouldn’t affect us to the same magnitude.”
The percentage of firms who responded to the survey who said they had good prospects for profitability remains high, with 35.8% saying they had “very good” prospects and 22.4% saying they had “excellent” opportunities for profitability. However, the report noted that those numbers are lower than last year, when 38.5% said they had “very good” prospects while 23.8% said opportunities were “excellent.”
Meanwhile, while credit tightness will likely mean it will cost more to get financing even in Canada, the report said capital has “remained disciplined” and should steady in 2009.
“In fact, Canada ranks third in the world – preceded by Asia Pacific and the Middle East – for a moderate to high increase in the availability of capital for real estate,” said Chris Potter, who is also a PwC partner.
The report said industrial real estate will be the strongest category next year, although all sectors will show strength, including housing. However, while the home sale market will hold steady, new housing development is expected to cool, the study noted.
Across Canada’s top real estate markets, Vancouver was named as the highest-rated city for 2009, with Calgary and Edmonton also receiving high ratings for “investment prospects, development and for-sale housing.” The report also named Ottawa as one of the markets with a fairly strong score.
Out east, however, the property markets appear to be weak, with the report warning investors to be cautious when looking into the Maritime markets, except if they are “knowledgeable about the specific centres in this area.”
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