Canadian real estate investment poised for rebound
I found this article in the National Post, we Canadians are savvy investors when it comes to Real Estate. We know the Canadian market is still undervalued and we are willing to put our money where our mouth is. Some of us are liquidating underperforming stocks in our portfolios to purchase property. This is good news for the Canadian Economy. Read on for inspiration!
OTTAWA -- Real estate investment is ready for a rebound, according to an international survey that suggests both real estate investors both in Canada and abroad are ready to put some faith -- and some money -- in the market.
Respondents to the 2010 Global Investor Sentiment Survey said access to financing was becoming easier, and the majority of private and institutional Canadian investors plan to use that money at home, according to Colliers International, a global real estate services company which conducted the survey.
Responses to the survey suggest that activities will start to pick up in the third quarter of this year.
“Cautious optimism is the prevailing wind across Canada,” wrote report authors Wayne Duong, Canadian director of research, and Milton Lamb, chair of Colliers Canada’s national investment team, adding that now is the time to buy, before interest rates go up as expected this summer.
While Canadian investors don’t believe the market has bottomed out yet, 65% of them plan to make real estate purchases in the next year; 64% of global investors signalled their intention to do the same.
The survey of more than 240 major real estate investors included 26 large Canadian institutional property investors, most of whom indicated they would be making Canadian purchases this year -- 27.8% planned to buy in Toronto; 16.7% in both Vancouver and Montreal; 14.8% in Edmonton; and 11.1% in Calgary. Eight out of 10 respondents said they had no intentions to invest overseas.
“On a risk-adjusted basis, Canadian investors still see Canada as a preferred investment destination that offers a higher return on investment compared to the U.S., in part because of the turmoil that still lingers south of the border,” said Mr. Lamb. “Additional reasons respondents gave for focusing on domestic investments range from the quality of assets to diversification of income stream, availability of capital or better valuation matching income.”
Canadian investors are also cleaning out their portfolios, with 54% saying they plan to divest under-performing or non-core assets.
Before real estate investments start to pick up, buyers and sellers will have to take some steps toward each other on price -- right now buyers think prices are too high and sellers think they’re too low, write the authors of the report.
“In fact in the first quarter of 2010, there are virtually no Canadian properties for sale as sellers have been reluctant to sell. As a result, the deal flow has been very weak,” they wrote. “In line with the expectation the recovery will take time, our investors see a ‘normalcy’ of transactions to occur during this year; consensus seem to favour this starting in Q3 of 2010, through to Q2 of 2011.”
Canwest News Service