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Western Canadian Real Estate Prices Just Won't Rise – Better Dwelling

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Canadian real estate prices are moving the most in over a year – which doesn’t say much. Canadian Real Estate Association (CREA) data shows the price of a typical home increased in November. Most of the index gains were from markets east of Toronto, which are booming after a slow few years. The drag on the index was located exclusively West of Toronto, where markets are mostly spiraling lower.

Canadian Real Estate Prices Rise Less Than 3%

Canadian real estate prices are moving higher, driven by movements in Eastern Canada. The typical price of a home reached $638,300 in November, up 2.55% from last year. The rise in prices are coming in just a clip above inflation, which CPI printed at 2.4% in the latest numbers. Last month’s 12-month increase is also the highest observed since August 2018. Not huge growth, but the highest in a long time.

Canadian Real Estate Benchmark Change

The 12 month price in change of a typical home across Canada.

Source: CREA, Better Dwelling.

Biggest Gains Are In Southern Ontario and Quebec

The Southern Ontario-Quebec corridor is seeing the biggest price gains from last year. Ottawa saw the biggest gains with a typical home hitting $443,500 in November, up 11.45% from last year. Montreal followed with prices hitting $380,000, up 8.72% from last year. Niagara came in third with prices hitting $431,200, up 7.99% from last year.

Canadian Real Estate Benchmark Price

The seasonally adjusted price of a typical home in Canada’s largest real estate markets.

Source: CREA, Better Dwelling.

Western Canadian Real Estate Markets Are The Biggest Losers

The biggest drop in prices are exclusively in Western Canada. The City of Regina made the biggest drop to $260,600 in November, down 5.52% from last year. Vancouver followed with prices hitting $1,002,700, down 4.59% from last year. Fraser Valley came in third with prices at $826,900, down 3.1% from last year.

Canadian Real Estate Price Change – 1 Year

The 1 year percent change in the seasonally adjusted price of a typical home, in Canada’s largest markets.

Source: CREA, Better Dwelling.

Most Eastern Canadian Real Estate Markets Hit New “Peaks”

Most of Canada’s large markets are now at peak prices, when they’re seasonally adjusted. Ottawa, Montreal, Niagara, Hamilton-Burlington, Toronto, Guelph, and Victoria all reached a new peak. Some segments, such as detached units, are not printing new all-time highs. Also worth a mention is many of these markets are not at all-time highs for average sales prices.

Markets Furthest From Peak Are All In Western Canada

Western Canadian real estate markets are furthest away from the peak. Regina, uh… bottom’s the list, with a typical home at  $260,600 in November, down 15.72% from peak. Edmonton follows with prices falling to $319,400, down 14.55% from peak. Calgary’s typical home price comes in third at $414,200, down 10.09% from peak. All of these markets haven’t seen peak in a few years, and were left out of the recent national price rally.

Canadian Real Estate Price Change From Peak

The percent change from seasonally adjusted peak pricing for a typical home in Canada’s largest markets.

Source: CREA, Better Dwelling.

Canadian real estate prices are back to rising, but growth is still low as an aggregate. Breaking it down regionally, we can see that Eastern Canada is seeing prices boom. This is especially true in markets that didn’t see a big jump during the national rally – such as Ottawa and Montreal. In Western Canada, things are still mostly in the dumper – accounting for most of the drag on the index. Yes, dumper is a technical term.

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Local firm anticipates Spring surge in Fort Saskatchewan real estate market – Mayerthorpe Freelancer

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“Looking at the cyclical nature of the real estate industry, combined with suppressed demand during lockdown, we’re going to see an uncapped demand. People are antsy and they want to get looking for their new home.”

Revere Real Estate is a local real estate firm, tracking market trends in order to give their clients the best home-buying experience possible.

Records have been set in real estate throughout COVID, including in November 2020, which Blais pointed to as an “historical month,” with an increase in sales of 27 per cent over the same timeframe in 2019.

Similarly, October 2020 home sales in the Edmonton region grew by 26 per cent compared to the same month in 2019. “The numbers we saw were unheard of for the fall,” he said. “November is typically the month that things really cool off, but sales remained steady.”

The new surge could prove hugely beneficial for Fort Saskatchewan, specifically, Blais said, as suburbs and more rural areas surrounding Edmonton could see significant real estate gains through COVID.

“Anecdotally, I was helping a client out in St. Albert look for a home in the range of $450,000, and every home we identified had offers accepted within three days of going to market,” he said. “It was crazy, and I think we’ll see that again in certain areas in and around the city.”

Noting that similar experiences are being had in Fort Saskatchewan, Blais pointed to anticipated growth in the Fort come the spring. “There’s quite a bit of development that continues outside of the City of Edmonton, and we’re also seeing what I call ‘perpetual urban sprawl’ in Edmonton,” he explained. “Developers have met that demand pretty well, expanding into regions that used to be farmland, so you can now get into single-­family homes for under $425,000 just west of the city.

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Canadian pension funds hunt for pandemic real estate bargains – CTV News

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TORONTO —
Canadian pension funds are seeking to boost their real estate investments, betting the slumping property market will recover as the COVID-19 pandemic recedes and office workers and city dwellers return to downtown properties.

Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the country’s largest real estate owners.

In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon, say market participants.

“We’re looking for buying opportunities,” said Hilary Spann, head of Americas real estate at CPP Investments, which manages $456.7 billion. CPP’s real estate portfolio generated 5.1% return for the year ended March 2020.

CPP announced a U.S. joint venture with Greystar Real Estate Portfolio to build multiple separate housing units this month, a deal that was initiated pre-pandemic.

In November, it signed an agreement with Hudson Pacific Properties to acquire an office tower in Seattle. Spann said a lot of buyers that would have been competitive in the Seattle deal were temporarily on the sidelines. “So we were able to step in and pick up that asset at yields that we thought were quite attractive.”

OFFICE VACANCIES CLIMB

As the pandemic forced many staff to work from home, the office vacancy rate in Canada hit a 16-year high of 13.4% in 2020, according to data from broker CBRE. Downtown offices were hit harder.

“I think pension funds are very well aware that…there are times when values dip a bit and vacancies go up but overall real estate assets are a great part of any pension fund portfolio,” Paul Morassutti, CBRE Canada vice-chairman said.

CPP’s Spann said while both rental markets and office may suffer in the short-term, it was expected that both markets would return when the pandemic comes to an end.

“Office may fall in the short term but in the long term, as everybody does start coming back to the office, I think it’s fair to say you may see a reversal,” she said, adding that the things that made places like New York and San Francisco vibrant will remain.

Kristopher Wojtecki, managing director for real estate at PSP Investments, told Reuters the fund had been increasing exposure in select sectors including single family rental and production studio real estate during the pandemic.

However, Canada’s second-largest pension fund, Caisse de depot et placement du Quebec, is taking a contrarian approach. A spokeswoman for Ivanhoé Cambridge, the real estate subsidiary of Caisse, said the fund is cutting exposure in traditional asset classes and prioritizing opportunities in growth sectors which include logistics and residential office buildings among others.

Grant McGlaughlin, partner at law firm Fasken, said he did not see any drastic moves on pension funds getting rid of their real estate portfolios.

“I think that’s the right thesis that there is no point selling into a low,” he said.

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Canadian Pension Funds Invest In Real Estate Assets – Baystreet.ca

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Canadian pension funds are increasing their real estate investments, betting the slumping property market will recover as the global pandemic recedes and office workers return to urban centres.

Canadian pension funds held $278.7 billion in property assets in 2019, up 4% from 2018, according to the Pension Investment Association of Canada, making them the country’s largest real estate owners.

In a world of slower economic growth, very low interest rates, volatility in equity markets, real estate offers an attractive opportunity for pension funds, which take a long-term investment horizon.

As the pandemic forced many staff to work from home, the office vacancy rate in Canada hit a 16-year high of 13.4% in 2020. Downtown office properties were hit particularly hard.

However, Canada’s second-largest pension fund, Caisse de depot et placement du Quebec, is taking a contrarian approach to real estate.

The real estate subsidiary of Caisse has said that the fund is cutting exposure in traditional asset classes and prioritising opportunities in growth sectors that include logistics and residential office buildings, among others.

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