Weekly Recap of Canadian Real Estate: October 26-November 2, 2014
The conflicting, on-going battle between the bulls and bears of the Canadian Real Estate Market.
This past Friday, an article by Gordon Isfeld on Financial Post addressed the first economy decline of the year, when it was revealed that the Gross Domestic Product (GDP) fell by 0.1%. A declining GDP brings up the question of whether this will be a trend, and if this adversely affects the real estate market.
Another troubling trend in the global commodity markets is the falling price of oil. Bank of Canada governor Stephen Poloz estimates that if the low price of oil persists, there could be a fall of at least 0.25% on Canada’s GDP. This could be significant, with banks projecting a 2-2.5% growth.
Meanwhile, the Canada Mortgage and Housing Corporation (CMHC) came out and revised its projection for 2015 on new homes, indicating a growth on an year-over-year basis. There are 189,500 projected units for 2015, while there were 189,000 in 2014.
Changing gears, a behavioral shift among Canadians has more and more choosing the city life over the suburban, white-picket fence dream of the past. The 112 page report was produced by Pricewaterhousecoopers and Urban Land Institute. Statistics Canada showed that urban centers grew by 7.1% between 2006 and 2011.
While Canadians are in an uncertain real estate market, the Canadian Pension Plan Investment Board (CPPIB) has decided to take it’s investments offshore, investing $396M into the Brazilian real estate market. This brings up the total of CPPIB’s investment in Brazil’s real estate market to $1.8B.