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Canada's real estate sector expected to rebound with economy in 2022 – Western Investor

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Canada’s economy and real estate market is expected to rebound in 2022 from early pandemic sluggishness shaken off through 2021, a real estate management company said in its annual forecast.

“Multi-suite residential rental and industrial properties are anticipated to continue outperforming when compared to office and retail assets,” said Keith Reading, research director at Morguard Corporation. “As the economic picture improves in 2022, investors will broaden their investment horizons in 2022 by looking to increasingly acquire office and retail assets.”

Investment performance remained strong in 2021 for industrial and multi-suite residential rental properties, while office and retail showed signs of stabilization due to efforts to reduce COVID-19’s spread and the subsequent easing of some restrictions, according to Morguard’s 2022 Canadian Economic Outlook and Market Fundamentals Report.

First and foremost, the real estate sector is dependant on how the economy rebounds, a situation further depending on what happens with the pandemic. And that’s an unknown given current spikes in infections, although vaccination rates continue to rise, with 81 percent of the population receiving at least one vaccine dose as of Dec. 11, according to the Public Health Agency of Canada.

Morguard said the economy is expected to continue to bounce back from the pandemic-driven correction in 2022, with output rising between 4-5 percent on an annualized basis.

The report predicted the services sector as a critical driver of growth in the coming year, following proportionately stronger expansion in the goods production sector in the earlier stages of the pandemic.

It further predicts Canada’s labour market will strengthen in 2022. This is due to the fact that by the fall of 2021, the unprecedented job losses due to the pandemic had been recouped, which drove the national unemployment rate down closer to the pre-pandemic level.

Effects on real estate

The national residential vacancy rate rose 1 percent year-over-year in October 2021 to a four-year high of 3.2 percent, with more pronounced vacancies in large cities. With the reopening of Canada’s borders and continued job growth, rental demand is forecast to gradually grow in 2022 and remain a preferred target for investors.

Decreased levels of immigration and post-secondary students due to border closures entering the country throughout 2021 contributed to reduced demand in the multi-suite residential segment.

In the commercial real estate sector, investment activity in the office segment in 2021 was relatively muted given the uncertainty of when pandemic restrictions would lift.

A total of $1.9 billion in office property sales was reported in the first half of 2021, down 37 percent year-over-year from $3.0 billion reported in the same period in 2020.

In 2022, most office-space tenants are expected to have employees return, putting tenants in a position to make decisions on longer-term leasing needs. If that happens the report predicted, activity levels and market conditions could stabilize leading to increased investor confidence will increase.

For the first half of 2021, Vancouver saw the lowest office vacancy rate level of major cities at 6.9 percent.

Industrial property

Industrial assets had record-low inventory levels across Canada in 2021. The national industrial availability rate reported a low of 2.3 percent at 2021’s mid-year mark. Availability rates of 1.1, 1.2 and 1.4 percent were reported at the midway mark of 2021 for Vancouver, Toronto and Montreal, respectively.

The situation was different in the warehouse, logistics and e-commerce sectors that saw businesses continue expanding at a relatively rapid rate, continuing the trend seen since mid-2020.

Leasing demand in those areas continues to outpace supply, creating a situation where tenants may have difficulty finding available industrial space in 2022 despite an anticipated pickup in construction activity.

Restrictions and retail

COVID restrictions impacting in-person shopping led to reduced activity in the retail sector in 2021.

The report said short-term lease renewals and government aid supported Canadian retail operations through the year but extended lockdowns contributed to declines in landlord and retailer revenues, and, in some cases, forced independent businesses to close

However, the report forecast, retail sector performance patterns are expected to improve in 2022, with the loosening of pandemic restrictions and the return of shoppers to retail centres.

jhainsworth@glaciermedia.ca

Twitter.com/jhainswo

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Canada’s Real Estate Bubble Is So Big Even The Mother of All Crashes Can’t Fix It – Better Dwelling

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Canada’s Real Estate Bubble Is So Big Even The Mother of All Crashes Can’t Fix It  Better Dwelling



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Lack of listings pushes Alberta real estate into a sellers' market – Calgary Herald

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High demand in Calgary and Edmonton, paired with continuing low supply, will likely drive prices higher in the year ahead, says Zoocasa

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Amid the success of the real estate market is a sore spot that could drive up prices more than expected, and that’s low inventory in the coming year, according to one national realty firm.

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While the pinch of low supply is most acute in larger centres like Toronto and Vancouver, Alberta is also “feeling the inventory pinch,” says Rachel Rehkopf, spokesperson for Zoocasa Realty Inc. in Toronto.

She points to December total sales rising by 27 per cent in Alberta while new listings remained stagnant.

That “pushed the entire province into sellers’ market conditions.”

The province sits at 2.5 months of residential inventory. That essentially means if no new homes came to market over the next two and a half months, and current demand for housing continues, Alberta would have no more homes for sale.

It’s a scenario that’s unlikely to happen, of course, and the overall supply-demand picture is better in Alberta than other parts of the country, she adds.

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In Ontario, for example, supply is 0.6 months while the metric is 1.7 months in British Columbia.

Yet Alberta’s supply is significantly lower than last year when it had four months of supply, she says.

Calgary is the tighter of the two large markets in the province with only 1.5 months of supply, while Edmonton actually added new listings in December, growing by about 10 per cent, year over year. Still, sales in Edmonton outpaced new listings, resulting in a 14 per cent decrease in inventory.

Overall, high demand in both cities paired with continuing low supply will likely drive prices higher in the year ahead, she notes.

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Welcome to Real Estate Friday! – theberkshireedge.com

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Here’s what we have for you this week in The Edge Real Estate section:

  • Property of the Week – Janet Kain of TKG Real Estate offers the opportunity to live in a stunning home, lovingly cared for and perfectly located for year-round enjoyment of the Berkshires.
  • Transformations – Designer Jennifer Owen and her clients imagined a calming space to relax while listening to the Boston Symphony Orchestra Live from Tanglewood on the radio!
  • Weekly real estate transactions for Berkshire County, Northern Litchfield County and, now, Columbia County
  • Market Perspective – Updated this week: The 2021 year-end real estate report from the Berkshire Board of REALTORS. What does it tell us?
  • The Self-Taught Gardener – How does Joan Didion’s approach to life and to her art inform our Self-Taught Gardener on how to garden?
  • Gardener’s Checklist – The holidays are over and the winter doldrums have set in. What’s a gardener to do to lift his spirits in these dark days?

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