2018 trends, strategies, predictions for Canadian real estate

Colliers on Canada’s Top 6 markets: ‘Positive story everywhere’

Commercial real estate owners are getting a Christmas present from Colliers Canada in the form of a rosy forecast for next year. “There doesn’t seem to be much negative on the horizon,” says Craig Hennigar, director of market intelligence for Canada at Colliers Canada in Vancouver. “Generally it’s a positive story everywhere.” It’s a sentiment that was also expressed a few weeks earlier, when CBRE’s Paul Morassutti provided an economic update at a strategy and leasing forum in Vancouver.

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Good year in store for CRE in 2018: C and W

Demand for commercial real estate from domestic and international investors will remain robust through next year, according to a Cushman & Wakefield report on capitalization rates in 11 Canadian cities. While there may be constraints from what’s made available for sale, and rising interest rates could pose risks, fundamentals and momentum are both strong, according to Cushman & Wakefield’s Stuart Barron. He expects 2018 to be “another banner year”.

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Amazon receives 238 bids for its second headquarters

The tally is in: Amazon received 238 proposals from cities, states, districts and territories interested in hosting the company’s second headquarters. The online retail giant published a map showing that bids came from D.C. and all but seven states — Arkansas, Hawaii, Montana, North Dakota, South Dakota, Vermont and Wyoming — as well as from most of southern Canada, three regions of Mexico and Puerto Rico. The shortlist is expected to be released early in 2018.

Toronto Star – CBC – Toronto Star – Betakit

‘Compelling investment offering’ for Bay Adelaide Centre

The fate of one of the most compelling investment offerings ever to come to market in Canada, for Toronto’s Bay Adelaide Centre, should be determined in the new year. The offering was made public in October and comprises 2.2 million square feet of class-AAA office space, consisting of the Bay Adelaide West office tower, Bay Adelaide East office tower, a PATH-connected retail concourse and a 1,000-stall parking facility.

Property Biz Canada

Demand for office space remains strong heading into 2018

Before zeroing in on Canada’s office market, it is useful to gauge the status of the country’s overall investment climate. According to the Bank of Canada’s (BoC) most recent Business Outlook Survey, the investment plans of firms cooled further in Q3 after hitting a seven-year high in Q1. However, the net percentage of firms planning to invest (+17) still remained above their historical average of +13.7.

Daily Commercial News

Recovery and confidence expected in Prairie CRE

Calgary’s economy is forecast to grow in 2018 for the second time in four years, advancing to a still-not-spectacular 2.2 per cent rise in GDP numbers. In general, new real estate development has slowed since 2015 as investors focused on cash flow of current projects as a glut of office and multi-family space overhung the market. But, according to a survey by PwC Canada, more Alberta and Calgary real estate firms are now on “the lookout for potential opportunities.”

Western Investor

North American CRE insurance rates could soar in 2018

North American commercial property insurance rates could rise by as much as 25 per cent during 2018 for properties that suffered catastrophe losses this year, according to a report by insurance brokerage Willis Towers Watson (WLTW-Q). The CRE insurance market, which has been soft during recent years, is now heading toward a correction, largely due to hurricanes Harvey, Irma and Maria. 

Reuters

Future of beleaguered retail resides in bricks and clicks

Retail has been a key asset class for investors to buy and hold with an eye to redevelopment, Matthew Boukall, senior director, residential, with Altus Group Data Solutions Inc., said in a recent market overview. The latest investment numbers from Altus Group indicate that, of the $10.1 billion worth of investment deals greater than $1 million in the first three quarters of 2017, retail deals represented $1.6 billion or 15 per cent.

Business In Vancouver – CBC – MarketWatch

10 surprising retail predictions for 2018

It’s been an exciting year. Amazon acquired Whole Foods and still no one knows what to make of Sears. We may be at a tipping point in retail’s history: 2018 could be momentous. With the “retail apocalypse” upon us, it is time we run for our fallout shelters.

Retail Dive

What will legal weed stores look like?

This is what the end of cannabis prohibition will look like in New Brunswick: An upscale showroom with black ceilings, grey walls and a once-illicit drug displayed in brightly lit glass cases. “Think along the lines of a jewellery store. Very chic, very modern, very clean-cut lines,” New Brunswick Liquor Corp. spokesman Mark Barbour says in an interview.

Financial Post – Business In Vancouver

New stores in store for Vancouver in new year

Landlords will grapple in 2018 to fill empty space left by Sears Canada’s collapse but that will not stop new construction and expansions at Metro Vancouver shopping centres. Renovations at large retailers such as Holt Renfrew will also complete, and new brands will launch storefronts to woo shoppers across the region. All this will happen while the established Granville Street strip in downtown Vancouver transforms.

Business In Vancouver

AI will continue to shake up real estate in 2018

There’s consensus that, one way or another, AI will transform life as we know it. Multiple industries will feel the impact of this growth, including real estate, where AI continues to transform how agents approach their work. Between 2010 and 2014, global investments in AI technology grew from $1.7 billion to $14.9 billion, according to eMarketer, and global AI revenue is expected to reach $36.8 billion by 2025.

Venture Beat

Why 2018 could be real estate’s year of turbulence

A teardown on Vancouver’s west side has been sitting on the market for more than three weeks, an eternity for a desirable listing by the standards of the city’s real estate craze. “Great to hold or to rebuild,” the feature sheet declares. The modest three-bedroom bungalow on a 33-foot-wide lot with a loft at the back has been listed for $3,070,000.

Globe and Mail (Subscription required) – Globe and Mail (Subscription required) – Financial Post

B.C. to introduce new real estate rules in 2018

The B.C. government has announced new rules it says will cut down on shady real estate deals in the province. Superintendent of Real Estate Michael Noseworthy says the changes are set to take effect March 15. They include better informing buyers about how much compensation realtors are entitled to, as well as restricting “dual agency,” where when one agent acts on behalf of both buyer and seller.

CBC – CTV

Metro Vancouver housing slowdown will have ripple effects

“Our housing market and our economy are becoming increasingly intertwined,” said Ryan Berlin, senior economist with the intelligence division of the Rennie Group, best known for its condo marketing programs. But with housing development continuing to lag behind demand, not to mention population growth, Metro Vancouver’s economy is, poised to feel the pinch in 2018.

Business In Vancouver – Business In Vancouver – CTV

CREA sees $1-billion hit to economy next year as home sales fall

Home sales in Canada are expected to tumble in 2018, pulling prices lower and creating a broader drag on economic growth for the country next year, according to the Canadian Real Estate Association. CREA released its 2018 forecast on Thursday, predicting home sales will fall by 27,000 units or 5.3 per cent in 2018 to 486,600 sales. The decline would come on top of a projected 4-per-cent national decline in sales this year.

Globe and Mail – Toronto Star – Newinhomes.com – Financial Post

Condos will prove increasingly popular in GTA in 2018

With tighter mortgage regulations coming in January, some uncertainty surrounds the real estate market in 2018. Toronto real estate agent Karyn Filiatrault, a TREB top five per cent rep with PSR Brokerage, spoke with CTV’s Your Morning to share the five real estate trends she expects in 2018:

CTV – Financial Post – Canada Newswire

Home prices set to climb on buyer demand in GTA: forecast

Home prices in Canada are expected to climb by almost 5 per cent next year as buyer demand in the Greater Toronto Area overwhelms the impact of tougher mortgage qualification rules, according to a Royal LePage forecast for Canada’s housing market. Royal LePage has kicked off the season for 2018 housing forecasts with a relatively optimistic outlook.

Globe and Mail – Canada Newswire

Toronto condo market to level off in 2018: Urbanation

The Toronto region’s heated condo market is set to level off in the first quarter of 2018, but not before the average downtown price per square foot crosses the $1,000 threshold for pre-construction units, says Shaun Hildebrand, senior vice-president of real estate market research firm Urbanation. Unsold condo inventory has already reached an average of $991 per square foot.

Toronto Star – Newinhomes.com

Montreal, Quebec could see new residential sales record in 2018

The Québec Federation of Real Estate Boards (QFREB) recently unveiled its outlook for the province’s 2018 residential real estate market. While the market is heading towards a new sales record this year, the board believes this record will be broken again in 2018. The number of sales concluded through the real estate brokers’ Centris system is well on its way to reaching a new high of 82,600 this year.

Canada Newswire

2018 housing outlook mixed for Prairie market

The short-term future of the residential sector in the Prairies is a tale of four cities – slow and steady in Winnipeg, a reversal of a two-year slide in Calgary and Edmonton and another year of declines in Saskatoon. Though GDP growth, employment and immigration fundamentals are slowly improving, industry players aren’t getting too far ahead of themselves. Caution is the word of the day. Or if you live in Winnipeg, it’s boring, but in a good way.

Western Investor – Edmonton Journal

U.S. multi-family lending trends to watch in 2018

Fannie Mae and Freddie Mac are making changes to their lending caps and “green” programs in 2018. These green loans, excluded from their caps, have helped increase market share. The FHFA, Fannie and Freddie’s regulator, typically aims for a market share of 40 per cent of all multifamily originations. However, their joint market share has crept up near 50 per cent this year.

CP Executive – CoStar Group

U.K. property forecasters expect four-year stagnation

Despite a better-than-expected performance by U.K. CRE this year, most major property consultants and fund manager researchers do not believe the market will remain strong beyond 2018. The Investment Property Forum’s (IPF) final UK Consensus Forecast report of 2017 found expectations across all three performance measures – capital values, rental growth and total returns – have increased.

IPE Real Estate – Financial Post