Image Source: Stephanie Keating Even though the global property market is well into a recovery, the situation is still fluid as portfolio restructuring continues and new trends emerge due to stronger financials. What major factors are impacting the international and Canadian real estate market today and where are experts seeing the best opportunities? Five Global Real Estate Trends to Watch in 2014: 1) Canadians Investing in the U.S According to Real Capital Analytics, Canada has surprisingly been the largest foreign investor in the U.S. since 2010. Even more notable is that the data details that the bulk of Canadian commercial real estate investment in the U.S. for the 12 months ending in August 2013 was focused primarily within the office sector. This direction of investment began to slow in 2013, which likely reflects the fact that investors are returning their capital to investments back home in Canada. 2) Calgary & Edmonton PwC's Emerging Trends in Real Estate report places Alberta's Calgary and Edmonton in first and second spot for Canadian cities to watch for investment in 2014. While Canada as a whole continues to shine on the world stage, the report points to looking for a “market within a market”, advising investors to hone in and look at individual deals based on their own merits, versus just “investing in Canada”. 3) Urban Focused As investment and risk appetite has grown, secondary markets have emerged very popular on the world stage. The Millennial generation (Gen-Y) continues to drive the recent trends, and the overwhelming consensus is that they enjoy an urban lifestyle and prioritize proximity to amenities. At the same time, analysts expect this trend to be compounded by the fact that aging Baby Boomers are beginning to move to urban areas in an attempt to live in closer proximity to health care services and local shopping. 4) Increased Mortgage Lending The recent drop in interest rates in Canada is only the beginning of the competition ahead. Lenders are increasing their commercial real estate exposure, while alternative lending sources are quickly moving in to put their own capital to work. 5) Asian Money Influx After forcing a bubble to its bursting point in Hong Kong and acquiring scores of prime London real estate, it is clear that wealthy Asian investors are seeking real estate as a means of wealth preservation, growth potential, and consistent yields. It is only logical that Canada will be the next stop for these wealth investors looking to bolster their portfolio returns.
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