Factors Driving Real Estate Investors to Canada
Here are three factors that will be driving more investment capital into Canadian income-producing properties in 2015.
1. Rising Rents
Rents have been steadily rising year after year, while this is a positive aspect for income property investors, the recent growth could also be pushing the market to limits where future investment returns can become stagnant.
In contrast to Canada where wages are strong, data shows rents have risen at twice the pace of income growth for almost a decade and a half. In hot markets, this means the minimum wage needed to afford the median rent is pushing as much as $80 an hour.
Canada and Alberta in particular, have quickly become the epitome of a strong employment market with relatively low jobless rates. December figures showed unemployment rising in other investment hotspots, investors are flocking to Alberta to capitalize on investment returns being generated due to the stable job market.
Between global investors and giant Canadian pension funds plowing into other markets, many have become frustrated with the heated bidding wars and overpriced commercial assets that deliver substandard yields. In contrast, Alberta continues to boast some of the top commercial real estate returns in the world, which has attracted the attention of many prominent real estate investors.