John Passalis, president and broker at Realosophy Realty, appears on BNN Bloomberg to explore trends in the Toronto real estate market.
Investor enthusiasm for Canada's commercial real estate sector is steadily growing, according to a new report.
Real estate firm Avison Young released a report on second-quarter investment trends on Tuesday, concluding that the majority of transactions were driven by retail investor activity. The report also highlighted that certain factors, such as economic conditions and population growth, are likely to drive a recovery in the real estate industry.
“The commercial real estate market is expected to continue to improve throughout the year, marking a notable turnaround from the challenges of the previous year,” the report said.
The report predicts that borrowing costs will fall further following the Bank of Canada's interest rate cut in June and as Canada's unemployment rate rises to 6.4 per cent and the job market softens.
Canada's population is also growing at a record pace, boosting demand for rental property across the country, the report noted. The multifamily sector “remains primarily dominated by individual buyers,” the report stressed, predicting that institutional investors will re-enter the market in the third quarter.
“These positive developments, combined with expected interest rate cuts and lower bond yields, have led to a steady rise in investor enthusiasm,” the report said.
Avison Young's research findings also suggest that in the second quarter of 2024, acquisitions of income real estate were led by Canadian private investors.
This trend accounted for 82% of transactions, up from 73% in the first quarter of this year, according to the report.
Canadian institutional investors accounted for 5% of these transactions, down 8% from the previous quarter, according to the report.