The Canadian real estate market is alive and well. In fact, it is anticipated to be as strong as ever in 2020 following its upsurge in 2019, per Morguard.
Morguard Corporation is a Canadian real estate company that publishes its predictions in the 2020 Canada Economic Outlook and Market Fundamentals Report. Below, I’ve highlighted the most vital forecast information from the Morguard report.
Canada’s CRE is on an Upward Trajectory
The retail facet of the CRE has displayed phenomenal growth in 2019 and continues to evolve in the new year. In the middle of last year, the national retail vacancy dived by 100 basis points to reach 5.8%.
By the by, numerous investors have seen big potential in Candian retail CRE assets, so much so that this nation has welcomed a staggering $3.1 billion investment in retail properties.
Given that this estimate is way above the long-term average, commercial real estate properties across Canada will continue to be seen as an incredibly formidable investment in the new decade.
Non-Retail CRE Also Sees Its Fair Share of the Action
Morguard has also forecasted that other commercial real estate segments in Canada will perform splendidly in 2020.
The housing market in Canada has finally achieved some stability after experiencing a sluggish 2019. Home sales and prices have steadily grown for 7 months consecutively in Toronto and Vancouver.
Over the span of the next 2 years, the national housing sector is anticipated to improve the real estate market significantly. The rental apartment industry has a track record of the biggest ongoing growth that will continue to generate positive numbers in 2020.
In 2018, the rental apartment sector generated a whopping $8.3 billion in multi-family investments. In 2019, the figure was approximately $4 billion in the first half alone.
Trends clearly show that more Canadians are downsizing and renting out their apartments. Morguard anticipates that rent rates will skyrocket with this growing demand.
The Canadian corporate segment is claiming a slice of this pie. With a soaring performance last year, the nation’s tech industry is largely to be credited.
Till mid-2019, Canada generated $5.5 billion in the office segment in investments alone. During that time there was an 11% national vacancy rate. Today, Vancouver and Toronto display the lowest vacancy rates in North America as far as downtown office space is concerned.
In Alberta, Calgary has been experiencing low energy prices and skyrocketing corporate vacancy rates which are over 20% at the moment.
The industrial sector in Canada showed record investments totalling $12.7 billion in 2018. This trend continued well into 2019 and is expected to do so in 2020 as well. The country is in need of more industrial spaces to meet the growing demand. During the first 6 months of 2019, the national availability was just over 3% which was the lowest in 20 years.
The CRE market in Canada has displayed an impressive performance in 2019 in spite of the international economic disputes and stunted GDP growth of 1.5%. Canada has one of the fastest-growing populations and this is one of the most essential factors that has aided the commercial real estate market in its steady growth.
The rental segment continues to hold its own and Canada will witness an influx of investors in 2020, per Morguard. CRE assets have made capital investments a very attractive proposition. All in all, the market is expected to be on an upswing in 2020.
For more information, please visit;