Six Factors Influencing Canadian Real Estate Investment in 2018
There is a lot going on in the world this year. That includes a lot of shifts in the national economy, regulations, and investment trends. Here are six things to pay attention that may fuel more real estate investment in Canada in 2018.
Lower Property Taxes
New Calgary business tax assessments are down an average of 5% according to the latest bills that went out in January 2018. Residential property tax bills rose modestly. This may make it an even more appealing time to invest in commercial property in Western Canada.
Rising Interest Rates
A new record low unemployment rate, signaling an incredibly strong Canadian economy, makes analysts believe it is going to be very hard for interest rates hikes not to be brought in for 2018. This typically creates a surge in new financing and refinancing, as real estate owners and investors look to optimize debt, and lock in great long term funding while things are good.
Higher Oil Prices
New extreme weather cycles only appear to be growing. That’s true for hurricanes, freezing polar vortex trend, and wildfires. Recent cold weather has spiked Canadian natural gas prices by 72%. Ongoing rises in oil, gas, and general energy prices will be welcome by many, and could provide a great further boost to the Canadian economy.
We’re already seeing more talk of a guaranteed minimum income in 2018. Some are floating that as a superior alternative to continued minimum wage hikes. Expect to see more talk of this emerging over the next year. Especially as the idea has been backed by Facebook’s Mark Zuckerberg, who has been rumored to be preparing for a run in politics. While there is not telling exactly how a plan like this may be executed, it appears that one way or the other, everyone ought to be enjoying slightly higher incomes ahead. That means more money for rent, and more disposable income to spend at local shopping plazas.
The Reinvention of Retail
Retail property asset managers have been gaining a new grip on emerging trends, and are getting out ahead with new innovations and ideas that will keep shopping plazas busy and more profitable than ever. That is creating a resurgence in interest in this property type among sophisticated real estate investors.
With a rapidly aging population in North America, more and more are realizing the need for passive income and security in their retirement investment portfolios. Real estate can be particularly beneficial as an asset for this group, and could see a further rise in investment over the next year.