Real Estate

Emerging Trends 2013_Canadian version

Issue link:

Contents of this Issue


Page 18 of 33

In 2013, the economic outlook for Ottawa looks weak. Population will increase only 0.8 percent, 90 basis points less than the average of the markets included in this report. Employment change does not look strong either, as projections show only a 1.0 percent increase, 35 basis points below the city's ten-year average. One buyer recommends, "stay out of Ottawa." The future of Ottawa's large number of government employees is questionable as federal cuts to balance the budget are underway. Employment in the public administration sector will decline 2.4 percent this year and an additional 1.5 percent next year. Economic slowdowns will affect residential and non residential construction, as declines in both areas are expected. With this decline in development, an investor says the "Ottawa market is very tight and will be difficult to enter." Yet despite the challenging economic times, survey participants still believe in some opportunities in this market. Development prospects were rated "modestly good," up from "fair" last year, and moved from sixth to fourth overall. Even with a continuing slide in housing starts expected to last until 2015, homebuilding remained stable in fifth position, with a slight increase in rating value. Investment prospects for Ottawa declined, dropping one position to sixth. Responses covering various sectors seemed uninviting: "vacancies have been high due to impact of technology sector's poor performance," "Ottawa: seeing some consolidation of office space," and "the industrial market is expected to be fair at best." Saskatoon (6). A large amount of interest is heard from interviewees and survey participants regarding the smallest market of the nine covered. With an estimated population possibly reaching 285,000, based on a 2.0 percent growth rate, Saskatoon is continuing to attract interest from commercial real estate investors and developers. Investment prospects for the city increased to "modestly good," from "fair," but its rank dropped one spot to seventh. Employment statistics show continued growth driven by strong mining and housing construction sectors, as well as an improving manufacturing sector. This expansion is attracting capital, as "many are starting to participate in investments in the Saskatoon area." Still, as the market strengthens, the future of further development remains questionable. Development prospects declined, but remain "fair." The city dropped from fifth to seventh rank on this measure, according to 2013 results. One interviewee disagrees, though, and plans on "land banking throughout Saskatoon for future development." Housing starts are forecast to slow in 2013 and beyond. However, homebuilding survey results differ, as Saskatoon jumps from sixth to third, receiving a "modestly good" rating. "Small growth in these areas is big growth." Montreal (7). "Montreal's outlook is good, but maybe not very good." Emerging Trends survey results recommend a hold strategy in all five property sectors. Apartment and hotel were the only two sectors where some participants are looking to buy, as both cracked 30 percent, but the majority of respondents still suggest investors sit on what they have. Sell signals are fairly strong in the industrial sector, as one-third say it might be time to exit this area. In 2013, economic development is moderate as gross domestic product forecasts display only 2.2 percent growth. Employment gains this year were zero, but some expansion—around 2.0 per-

Articles in this issue

view archives of Real Estate - Emerging Trends 2013_Canadian version