Canadian Top Commercial Real Estate Stories and Trends of 2017

The Canadian real estate market of 2017 made record-breaking transformations marked with heated housing sales, robust construction and retail real estate demand exceeding supply.

Toronto’s housing boom peaked

The average price of a GTA home increased by $100,000 in just one month!

Some of the factors characterizing this trend include 22.6 percent increase in the benchmark price of a GTA home from 2016, the sales-to-new listing-ratio being 93.5 percent in January (listings were snatched almost as they hit the market), along with a vital supply shortage that drove up prices, BMO’s Chief Economist, Douglas Porter was quoted as saying.

The rise in average housing price was coupled by a hike in mortgage rate increasing by 25 basis points to 0.75 per cent.

To cool heating housing market, the government imposed new housing regulations requiring uninsured buyers to qualify for an additional two percent of the current Bank of Canada’s benchmark rate or their contract rate.

2017 marked with robust construction

Canadian real estate market of 2017 was marked with robust construction.

Even Google called an agreement to invest $50 M to explore the development of Quayside, a 12-acre district of Toronto’s waterfront. A division of Google’s parent company has plans to expand the project to create Sidewalk Toronto, an 800-acre, 3.3M SF smart city community, Bisnow reports.

A 3.2B subway extension of Vaughan opened in December first time linking the city beyond Toronto’s city borders.

Extensive construction was marked in the downtown with a 85-plus storeys (1,005 feet) building rising to be the country’s tallest building surpassing Toronto’s First Canadian Place.

The downtown construction was geared by twin towers with 49 and 50 storyes and 2.9M SF. “Adjacent to Union Station, the downtown office and retail towers are expected to set a new, international standard for office space, including amenities as first-class fitness, bicycle-parking facilities and an elevated park” Bisnow reports.

Real estate demand exceeded supply

A record number of investors continued to buy assets. Investments by the end of Q3 already topped $33B, and are likely to be up to $40B by year-end, according to CBRE. Toronto Real Estate Board reports that only half the number of housing listings were available in February 2017 in comparison to the same time in the previous year. According to “in a sizzling real estate market, the Sheraton Centre hotel and convention complex on Toronto’s Queen Street West drew the attention of multiple buyers and sold in October to a unit of Brookfield Asset Management Inc. for $335 million, making it the largest single hotel transaction in Canadian history.” To stabilize the heated market, the government introduced Non-Resident Speculation tax, which applies to non-Canadian citizens as well as non-permanent residents purchasing residential properties within the Greater Golden Horseshoe area.

No wonder Canada toped in U.S. investment. “A September report from JLL found Canadian investment in U.S. real estate amounted to $5.2B in the first half of 2017, or 30% of total global foreign investment. By comparison, China came in second with $3.6B (21%) in U.S. acquisitions,” Bisnow reports.

“Inventory shortages continue to drive up U.S. home values, but prices in five countries, including Canada, experienced even quicker appreciation,” Inman quoted NAR Chief Economist Lawrence Yun as saying. “Some of the acceleration in foreign purchases over the past year appears to come from the combination of more affordable property choices in the U.S. and foreigners deciding to buy now knowing that any further weakening of their local currency against the dollar will make buying more expensive in the future,” the economist says.

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