The ease of doing business initiative by the government will have a positive impact on the market and things will improve soon.
The real estate sector is facing tough times for some time now, but the commercial segment is still doing well and also getting the maximum attention of investors. In fact, 2019 saw a total PE inflow of $970 million into Indian retail, and commercial realty attracted the maximum private equity investments, totaling nearly $3 billion in the first three quarters. In the retail sector, vacancy levels have come down to 14 per cent in the calendar year 2019. Approximately 7 million square feet of retail space is expected to enter the market in the year 2020, thereby contributing to the overall robust growth of the real estate sector in India.
Growth in this segment is good as investors show great interest in commercial and recently NRIs have also started investing in this segment mainly because of lucrative returns. When we compare the investment in commercial with residential, then it can be said that returns from commercial are better. An increasing number of private equity funds showed interest in the commercial office space in 2018, which was followed by the same in 2019. And now with news of India’s first REIT trickling in, the trend of commercial office space having an upper hand in real estate assets will stay. There is likelihood of further infusion of liquidity in commercial property and developers will come up with more projects in this segment.
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This segment, which includes industrial, retail and frontier segments such as co-living, is doing well because of good returns in the short and long term.The investors with real estate know-how diverted their attention towards the commercial real estate. Commercial office stock is likely to cross 600 million sq ft and office space leasing in major cities is expected to cross 100 million sq ft by 2020. Co-working spaces in major cities has seen a sharp increase as it reached around 3.44 million sq ft as compared to 1.11 million sq ft in 2017. With the government taking necessary steps for fueling the economy, the sector is likely to bounce back and continue with its good run.
The ease of doing business initiative by the government will have a positive impact on the market and things will improve soon. When we compare the investment in commercial with residential, then it can be said that returns from commercial are better. With the residential real estate becoming end-user driven, the commercial real estate has emerged as a more attractive investment proposition for individual investors as well as institutional funds. Due to the investment potential of commercial spaces, developers are also responding to the demand, which will automatically generate demand for residential. So the symbiosis of commercial and residential bodes very well for the real estate market. A good commercial property gives the average rental yield of 6%-10%, while the rental yield from residential property is 1.5% – 3.5%. The same holds true for capital appreciation in the current market scenario.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
