The global market currently faces a lot of uncertainty, and that uncertainty may wind up working in favour of Canada’s commercial real estate industry. Canada’s commercial development market had a favourable year in 2016 and is only continuing that trend in 2017. This has played a large part in the boom in investment appeal of Niagara. Much of this growth has come from foreign investments, who find Canada a safer bet to invest in than other global markets.
Unstable economic climates
There is a large amount of uncertainty surrounding our neighbour, the United States, as investors await details on more policy plans from the administration. Since the inauguration in 2016 there has been no clearly laid out economic strategy, so investors are holding their money away from the country.
Uncertainty also comes from Europe, where recent events in the European Union have forced investors to be more wary of making investments. Brexit upset the economic climate within the UK, and one major political party in France also wants out of the EU, likely with more continuing to separate as it goes on. The changing political climate makes for an increasingly unstable economic climate.
Foreign commercial investment on the rise
Investors want safety in where they sink their money. That safety, it seems, they’ve found in the Canadian commercial real estate market. Canada just wrapped up a record breaking year for commercial real estate investment. In 2016 Canada saw $34.7 billion worth of commercial development property sold and purchased. Foreign investment has played a large part in Ontario's plan for growth.
Toronto envy
Some of this interest is based in what some in the real estate market call “Toronto envy” - the envy from other markets in regards to the state of Toronto’s commercial real estate industry right now. Toronto has started 2017 extremely well in commercial real estate and that doesn’t look to be changing any time soon.
Toronto currently has the lowest downtown office vacancy rate out of all the major North American cities. Not only that, but there is also good rental growth projected for the rest of the coming year. The city also has the second lowest industrial availability rate, as well as the second lowest multi-family vacancy rate. In the hospitality sector, Toronto is excelling as well - record occupancy levels were recorded in 2016 and aren’t slowing down.
Projections for the rest of 2017
Though the attractiveness of Canada as a place for foreign investors to come to will not fade, there is some projection that the vacancy rates will start climbing. Canada overall is expected to climb 13.3 percent (largely driven by the high expected vacancy rate in Alberta). Toronto is expected to climb to 5.1 over 2016’s 4.4% vacancy rate - still keeping it the lowest vacancy rate in the major cities in Canada.
With this boom in foreign investment in the rets of Canada, investment opportunities in Niagara only stand to boom.
