Cushman & Wakefield LePage's Outlook '09 and Annual Market Review was conducted in 11 Canadian markets, and captures both quantifiable data and the qualified opinions of those working in the market, covering the office, industrial, retail and investment sectors. It also provides forward looking statistical projections for the 2009 market.
"There remains little doubt that Canada is headed towards a recession stretching into at least the first quarter of 2009," said Pierre Bergevin, President and CEO of Cushman & Wakefield LePage. "However, we don't expect to see any radical market corrections in Canadian commercial real estate - thanks to solid lending practices and conservative development strategies over the past decade."
Wednesday, November 26, 2008
Tuesday, November 25, 2008
Quebec pension fund forced to dump $10-billion worth of shares into plunging markets
The Caisse de dépôt et placement du Québec, hammered by losses on international holdings, has been forced in recent weeks to sell billions of dollars of stocks into a falling market.
A fund that began the year with $155.4-billion of assets has sold $10-billion of stocks in the past two months, sources said.
Canada's biggest pension fund needed cash to shore up or shut down money-losing positions in areas such as currency hedging and derivatives, along with international real estate and private equity. Part of the problem, sources said, is that the fund's hedging strategy was sideswiped by the recent fall in the Canadian dollar.
"The Caisse is dumping stock into a collapsing market, so losses are no longer just on paper, they've been realized," said one executive familiar with the fund's operations.
A fund that began the year with $155.4-billion of assets has sold $10-billion of stocks in the past two months, sources said.
Canada's biggest pension fund needed cash to shore up or shut down money-losing positions in areas such as currency hedging and derivatives, along with international real estate and private equity. Part of the problem, sources said, is that the fund's hedging strategy was sideswiped by the recent fall in the Canadian dollar.
"The Caisse is dumping stock into a collapsing market, so losses are no longer just on paper, they've been realized," said one executive familiar with the fund's operations.
Sunday, November 23, 2008
Toronto Real Estate Market Remains Slow Mid November
Home sales continue to slide in Toronto's real estate market.
The Greater Toronto Area recorded 1,991 home sales during the first half of November 2008, a 44% decline from the 3,544 sales during the same period last year. Prices appear to have stabilized with the average price for a home in the GTA dropping 4.5% to $375,712. Prices in the 905 region remained virtually unchanged over last year while prices in the city of Toronto dropped by 7.5% over last year.
As I've noted in previous posts, the decline in average price for the city of Toronto is exaggerated because of the effects of the land transfer tax last year.
‘It’s particularly important to interpret the 416 area statistics in context given the market surge we saw a year ago when buyers moved to avoid the new Toronto Land Transfer Tax,” said Toronto Real Estate Board President Ms. O’Neill. “At midmonth a year ago, transactions in the 416 area had increased 24 per cent over the same period in 2006.”
The Greater Toronto Area recorded 1,991 home sales during the first half of November 2008, a 44% decline from the 3,544 sales during the same period last year. Prices appear to have stabilized with the average price for a home in the GTA dropping 4.5% to $375,712. Prices in the 905 region remained virtually unchanged over last year while prices in the city of Toronto dropped by 7.5% over last year.
As I've noted in previous posts, the decline in average price for the city of Toronto is exaggerated because of the effects of the land transfer tax last year.
‘It’s particularly important to interpret the 416 area statistics in context given the market surge we saw a year ago when buyers moved to avoid the new Toronto Land Transfer Tax,” said Toronto Real Estate Board President Ms. O’Neill. “At midmonth a year ago, transactions in the 416 area had increased 24 per cent over the same period in 2006.”
Wednesday, November 19, 2008
Toronto's MaRS project a step too far
It's one trip to Mars that's going to take longer thanks to a slowing economy, says the vice-president of the $300-million Medical and Related Sciences complex in Toronto's hospital district.
The second phase of the two-square kilometre project, dubbed MaRS, has been put on hold because the developers can't find enough tenants ready to move into the 750,000 square foot complex by the completion date set for 2010. Phase I of the project was finished in 2005 and its 700,000 square feet are filled.
"The construction has been suspended. It's a reflection of the market conditions right now," says Randal Froebelius, vice-president of real estate for MaRS, a not-for-profit corporation. "We don't want to build an empty building."
The second phase of the two-square kilometre project, dubbed MaRS, has been put on hold because the developers can't find enough tenants ready to move into the 750,000 square foot complex by the completion date set for 2010. Phase I of the project was finished in 2005 and its 700,000 square feet are filled.
"The construction has been suspended. It's a reflection of the market conditions right now," says Randal Froebelius, vice-president of real estate for MaRS, a not-for-profit corporation. "We don't want to build an empty building."
Tuesday, November 11, 2008
Montreal Existing Home Sales Fall in Q3, but Prices Continue to Rise
(CEP News) - Despite falling single-family home sales in Montreal and rising listings in the third quarter, a tight real estate market continues to drive prices higher, the Greater Montreal Real Estate Board (GMREB) said Wednesday.
The average price of a single-family home in Montreal was $273,872 in the third quarter, up 6% from a year ago despite existing home sales being down for the same time period, the GMREB reported. Overall home prices rose 5% in the quarter compared to a year ago, following a 4% increase in the second quarter and a 6% year-over-year rise in the first quarter.
Single-family home sales fell 2% from a year ago to 5,098 transactions, with sales on the Island of Montreal leading the decline by falling 11%. Overall sales in the Greater Montreal Area, however, are actually up 1% to 8,463 in the quarter, despite the slowing economy.
"The introduction of new rules relating to the maximum amortization period and the minimum down payment required for insured mortgages may have prompted a number of households to purchase earlier than planned", said Stéphane Duguay, market analyst at the Canada Mortgage and Housing Corporation.
The average price of a single-family home in Montreal was $273,872 in the third quarter, up 6% from a year ago despite existing home sales being down for the same time period, the GMREB reported. Overall home prices rose 5% in the quarter compared to a year ago, following a 4% increase in the second quarter and a 6% year-over-year rise in the first quarter.
Single-family home sales fell 2% from a year ago to 5,098 transactions, with sales on the Island of Montreal leading the decline by falling 11%. Overall sales in the Greater Montreal Area, however, are actually up 1% to 8,463 in the quarter, despite the slowing economy.
"The introduction of new rules relating to the maximum amortization period and the minimum down payment required for insured mortgages may have prompted a number of households to purchase earlier than planned", said Stéphane Duguay, market analyst at the Canada Mortgage and Housing Corporation.
Friday, November 7, 2008
The outlook for Canada. Existing leases for space will keep commercial landlords afloat for short term
Real estate, specifically bad loans to the wrong people, is at the root of the financial crisis in the U.S. That burst the speculative bubble, but the same hasn't happened in Canada. Banks were more careful about whom they lent to. Still, the Canadian economy is teetering on the edge of a recession and real estate will suffer, experts agree.
We asked Stan Krawitz, president of Toronto real-estate consulting firm Real Facilities Inc. about the prospects for commercial real estate.
Q: How is commercial real estate faring in these recessionary times? Are real-estate developers able to find financing? If so, where and at what terms? If not, why not?
We asked Stan Krawitz, president of Toronto real-estate consulting firm Real Facilities Inc. about the prospects for commercial real estate.
Q: How is commercial real estate faring in these recessionary times? Are real-estate developers able to find financing? If so, where and at what terms? If not, why not?
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