Multi-suite residential and industrial real estate remained resilient and attractive to investors during Q3 2020: Morguard - Canada NewsWire | Canada News Media
Canadian job market continued to strengthen in Q3 after historic losses resulting from COVID-19’s first wave
Assets with financially stable tenants on longer-term leases to continue to attract investors in the remainder of 2020
Consumer and investor confidence expected to return at some point during 2021 assuming some form of resolution of the pandemic and a subsequent improvement in the economic outlook
Morguard Canadian Economic Outlook & Market Fundamentals Third Quarter Update 2020
MISSISSAUGA, ON, Nov. 18, 2020 /CNW/ – During the third quarter of 2020, the multi-suite residential and industrial sectors of Canada’s commercial real estate remained resilient despite the economic slowdown resulting from the pandemic. Meanwhile, the office and retail segments witnessed increased vacancy levels in most Canadian cities as restrictions in response to a second wave of COVID-19 kept Canadians working and shopping from home, according to the latest Canadian Economic Outlook and Market Fundamentals Report issued by Morguard Corporation (“Morguard”) (TSX: MRC).
“The steady performance of multi-suite residential and industrial assets during the pandemic continued to attract investors during the third quarter of 2020,” said Keith Reading, Director, Research at Morguard. “Canada’s job market continued to recoup after the losses seen in the spring, however, office and retail assets are anticipated to underperform in the approaching atypical holiday season. Entering 2021, consumer and investor confidence are anticipated to return, aligned with further developments regarding a COVID-19 vaccine or more effective treatments.”
Commercial Real Estate Demand for multi-suite residential assets outperformed the office and retail sectors in the third quarter of 2020, continuing with the trend seen since early 2020. The segment’s stable performance is in part attributed to the uncertainty brought on by the pandemic regarding job losses, as many Canadians who had planned to purchase a home in 2020, have decided to continue renting until the economic landscape becomes clearer. For investors, multi-suite residential assets remained a safe, long-term investment. Looking ahead, investment demand for multi-suite residential assets will continue to outpace the supply of available properties in major centres such as Toronto, Montreal and Vancouver.
Demand for industrial investment properties also exceeded supply during the third quarter of 2020. More than $1.0 billion in industrial property sales was tallied in the country’s major markets combined. Investment sales have exceeded $1.0 billion mark in every quarter dating back to the first quarter of 2014.
In the office segment, downtown vacancy rose sharply in most Canadian cities in the third quarter of 2020 with a spike in sublease availability and a subsequent increase in supply. Tenants were pushed to reduce their footprints in the core of the country’s most expensive markets due to heightened economic and financial uncertainty. Investors applied caution when purchasing office assets and focused on stable investments with financially stable tenants on longer-term leases as a more forward-looking approach.
Looking ahead, institutional investors are expected to target prime properties in Toronto, Montreal and Vancouver most aggressively, which will ensure property values hold firm. The Canadian commercial investment property capital flow is anticipated to remain muted over the near term, barring some form of resolution of the COVID-19 pandemic and a subsequent improvement in the economic outlook.
Economic Factors The proportion of Canadians collecting the Canada Emergency Response Benefit, Canada Emergency Student Benefit or Employment Insurance fell to 13.5 per cent in September, down from 16.1 per cent in August, depicting a moderate improvement in Canada’s economy, combined with a bounce back in the job market.
During the third quarter, the Bank of Canada continued to adapt to the economy’s evolving conditions and responded to support Canadian businesses and borrowers. In the same period, global equity markets strengthened as a result of an improved global economic outlook, however, an increase in the number of COVID-19 cases across the country may impact the global equity market forecast for the near term.
The Consumer Price Index (CPI) increased modestly during the third quarter, due largely to subdued domestic services demand. Inflation levels are anticipated to remain muted over the next few months, as a result of excess economic capacity and an overall weakened labour market.
Retail sales grew at a moderate pace in the third quarter after a strong rebound from the losses as a result of the COVID-19 pandemic closures. Retail sales increased by 2.6 per cent year-over-year as of July. Except for gasoline and clothing, sales were up for all spending sub-categories.
The third quarter update of the 2020 Economic Outlook and Market Fundamentals Research Report, released today by Morguard, provides a detailed analysis of the 2020 real estate investment trends to watch in Canada. The full report is available at morguard.com/research.
About Morguard Corporation Morguard Corporation is a major North American real estate and property management company. It has extensive retail, office, industrial, hotel and residential holdings owned directly and through its investment in Morguard Real Estate Investment Trust and Morguard North American Residential REIT. Morguard also provides real estate management services to institutional and other investors. Morguard’s owned and managed portfolio of assets is valued at $19.4 billion. Please visit http://www.morguard.com or follow us on LinkedIn.
Forward Looking Statement Disclaimer Statements contained herein that are not based on historical or current fact, including without limitation statements containing the words “anticipates,” “believes,” “may,” “continue,” “estimate,” “expects” and “will” and words of similar expression, constitute “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and regionally; changes in business strategy; financing risk; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted; and other factors. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Publisher does not assume the obligation to update or revise any forward-looking statements.
SOURCE Morguard Corporation
For further information: K. Rai Sahi, Chief Executive Officer, T 905-281-3800; Keith Reading, Director of Research, T 905-281-3800; or email [email protected]
TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.
The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.
The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.
“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.
“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”
The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.
New listings last month totalled 15,328, up 4.3 per cent from a year earlier.
In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.
The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.
“I thought they’d be up for sure, but not necessarily that much,” said Forbes.
“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”
He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.
“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.
“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”
All property types saw more sales in October compared with a year ago throughout the GTA.
Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.
“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.
“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”
This report by The Canadian Press was first published Nov. 6, 2024.
HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.
Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.
Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.
The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.
Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.
They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.
The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.
This report by The Canadian Press was first published Oct. 24, 2024.
Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.
Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.
Average residential home price in B.C.: $938,500
Average price in greater Vancouver (2024 year to date): $1,304,438
Average price in greater Victoria (2024 year to date): $979,103
Average price in the Okanagan (2024 year to date): $748,015
Average two-bedroom purpose-built rental in Vancouver: $2,181
Average two-bedroom purpose-built rental in Victoria: $1,839
Average two-bedroom purpose-built rental in Canada: $1,359
Rental vacancy rate in Vancouver: 0.9 per cent
How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent
This report by The Canadian Press was first published Oct. 17, 2024.
