New Finance Rules & Trends Boost Canadian Commercial Property Market

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New changes are fueling more growth in Canada’s commercial property market.

According to new research by Morguard, a strong third quarter for Canadian commercial property is putting the nation on track for even stronger sales than last year, and is setting a new pace that could carry through 2018. Q3 commercial real estate sales saw over $1B invested in the office sector, with strong demand for industrial property in Alberta as well. This comes on top of recent news of quick sales and a healthy appetite for retail property in Western Canada too.

New Mortgage Rules & Bigger Down Payments

Canadian regulators been pushing through even more rules. Now even those with larger than 20% down payments may be penalized, in an effort to cool the housing market. The Financial Post reports that this is likely to kick in and subdue the market in 2018.

At the same time financial experts are pointing out that saving up for a 20% down payment may no longer be a smart money move. Rob Carrick of The Globe and Mail says that even with mandatory mortgage insurance for lower down payment borrowers, higher ratio borrowers can actually get better interest rates, and lower payments, while keeping their cash free to invest.

A home is not really a pure investment either, and it doesn’t throw off income every month. With regulators determined to cool the residential housing market by any means necessary, sooner or later home values are going to come down. That means negative returns on any money put into a home. It also means being forced to keep paying into a losing investment, unless you just want to throw it all away, and take the hit to your credit.

In contrast, putting less down on a home, or even renting for a while can leave extra money to invest instead. Those investments can in turn pay for homes and housing, especially if they are income producing investments.

Another new report shows that wealthy Canadians are also more likely to invest in more diversified asset classes, and alternative investments, like real estate (outside of their personal residences).


New mortgage and finance rules are making it less attractive and profitable to put cash into homes. Many will be far better off using those funds to invest. With Canada’s growing commercial property market, and the income it can produce, more wealthy and savvy Canadians may make this move over the next few months.